Temptation Under the Armour

OK, so I have a bit of a tendency to buy popular growth stocks on pullbacks -- if I believe the growth story, my knee jerk reaction is often to pick up a few shares or a few call options when what appears to be a temporary setback brings the share price down.

This is what happened when I doubled my Google holdings at $510 or so when their earnings disappointed slightly. And though I haven't gotten around to writing about it yet, this is the same thing I did with Apple recently when the "sell the news" drop hit AAPL shares when the iPhone price cut freaked everyone out and let me pick up shares in the mid-$130s (perhaps it's for the best that I didn't write about it ... who on earth wants to hear yet another blogger talking about Apple, by far the most popular stock for online discussion? I can't say that I have anything new to add to that debate).

And I'm tempted again -- this time for a stock that I had derided for quite a while even though it's a "local boy makes good story."

This time, it's Under Armour -- founded just down the road from me by University of Maryland grad and mediocre football player Kevin Plank, who has turned out to be an excellent marketer and athletic clothing trendsetter.

I thought Nike would chew them up and spit them out, and that the introduction of the compression clothing and other Under Armour specialties by Reebok, Nike, and others would kill the market for this young upstart. Clearly, I was wrong ... at least so far. They have created a powerful brand in just a couple years, and they are probably causing Nike to panic a little bit with their entree into footwear. Nike was built on the running craze of the 1970s and the basketball golden age (also called the "Michael Jordan" age) of the 1980s and early 1990s. Perhaps Under Armour will be the first company to successfully build an athletic brand with mass appeal that's based on football, the sport with the broadest appeal.

I don't really know if they will succeed, but the latest share dip has me considering a purchase. In the short term, here's my logic:

The shares were downgraded in the middle of last week by an analyst at UBS lowered his rating and price target. But the real thing that caught my attention was this:

They lowered the price target because of weather.

Now, I'm the first one to laugh when any kind of company, especially a retailer, blames the weather for poor results. If Under Armour had released earnings and blamed the lack of a cool September for flagging product sales, I might find any resultant dip to be a buying opportunity, too ... but I would probably find it easier to resist the temptation, because I would lose a fair amount of respect for management.

So essentially my point is this: When an analyst gives a weather-related excuse for a short term possible sales dip, I get very tempted to buy. When a company gives that same excuse, I am more likely to make fun of them. Or at least, to take advantage of selling by investors who believe that one month's sales makes or breaks an investment.

Weather happens every year -- warm weather, cold weather, it all evens out in the end. If Under Armour needs a few cold days to spur sales of some of their garments, I am absolutely certain that those cold days will eventually come. If they come in October instead of September, I can live with that.

I haven't talked at all about the reasons I still am cautious about Under Armour -- man oh man are the shares expensive -- the forward PE, weather or no weather, is still 45, which is pretty big for a company that the analysts think will only grow earnings by about 30% next year. And the share price did fall back by 8% or so on the downgrade, but we're still up near the all time highs for the stock. Analysts have not consistently lowballed the earnings, so you can't say that they always blow out their estimates, either -- they did last time around, but the analysts were prety close in the two quarters before that.

So this is really about faith in a brand, and a vision for long term growth. Under Armour is just about a tenth the size of Nike right now, and growth that stays around 20-30% for a decade is certainly worth more than a 45 PE ... but will that happen?

I don't know ... but, short term, I'm tempted. I'd like to see some more temporary bad news hit the shares a little harder, but I just might buy a bit of this one before too long.

Full disclosure: As of this writing, I do own shares of Google and Apple, but no other companies mentioned here.

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Buying the Google Dip (GOOG)

Well, this is certainly not a contrarian assessment -- the web is achatter with people who are musing about this earnings shortfall as a buying opportunity in Google shares, including most analysts -- but sheep or no, I'm jumping in a little.

I've been a GOogle shareholder for about two and a half years, but I did sell a portion of my holdings about 18 months ago -- taking profits after my one year holding period partly because I was nervous about short term pricing, and partly because Google had become by far my largest holding.

Now, after a little share hiccup, I'm buying back those shares (for more than I sold them for, unfortunately, but for a price that I think is fair). I sold shares right around $400, and bought them back last night at an average price of $508, which brings my average cost basis all the way up to $350.

Thanks to a portfolio that is much larger now, Google is not back to being my top holding, but it is now in the top five again.

Why did I buy?

Well, the short answer is that the earnings were too good not to at this price. I understand that the price run up to $550 was based on some probably irrational momentum enthusaism, but I didn't think $550 was such a crazy share price.

Here's how the numbers compare from the March 2006 earnings release, when I sold a few shares, to today's news:

Sales
March 2006: $1.92 billion
July 2007: $3.87 billion

Earnings:
March 2006: $372 million
July 2007: $925 million

That's right -- sales about doubled, earnings came close to tripling. Even though the margins are not what was hoped for in this latest release due to a hiring binge, that ain't bad long term performance.

Gross margins have been pretty steady over the past year at near 60%, though net margins are weaker. I'll take that over the opposite outcome (better net margins, worse gross margins) because it means Google's problems are cost-related, not that they're losing pricing power due to competition.

And that's really the key: here in the US, at least, there is precious little competition, and no sign that competition is niping at Google's heels despite Microsoft and Ask and Yahoo ALL launching improved services and much better ad systems in the past year or so. Overseas, even in places like China where Google has market share problems so far, there isn't a single market where Google couldn't buy their biggest competitor without breaking a sweat. ... and overall, Google's international growth continues to outpace even the very good US results.

The "law of large numbers" argument, that Google cannot sustain its growth rate, is somewhat compelling ... but it certainly hasn't impacted Google yet in a meaningful way. It's true that earnings growth has slowed somewhat due to investment, but we're still talking about near-60% sales growth and a company that, I believe, is likely to hit an inflection point with their recent achievement of "full" staffing levels that may enable them to increase margins in coming years.

So ... I can't argue with the market pushing GOOG shares down by a few percent today, as seems to be the final result. But the 8-9% hairdcut the shares got overnight and early this morning was a bit overdone, and I'm glad I picked up a few shares.

I like the fact that Google is investing in more people right now, especially because many of them are overseas hires or hires who can help build Google's next generation of services. Google even indicated that a good portion of that 1% earnings miss may have been caused by the one-time $60 million impact of a change in ther HR accounting policies.

But really, I just want to hold Google shares as a significant part of my portfolio, and this dip gave me a timely opportunity to restore that position when I happened to have cash on hand. Google beat analyst predictions for sales growth during a seasonally challenging quarter, and they're investing in the future with more engineers and salespeople. I think we continue to underestimate the long term growth potential here, though Google will likely look expensive on a trailing PE basis for many years. I'll try to ignore the quarter to quarter volatility and keep my eye on the prize: world advertising domination.

disclosure: I do own shares of Google, and am also a Google AdSense publisher.

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Tight Fisted Googlers (GOOG)

I find it remarkable that it was over a year ago when I questioned Google's decision to do a secondary offering to raise $4 billion dollars ... and they still haven't spent that money.

This comes to my attention again because Google has now crossed the line and has so much in cash and short term investments that they risk being regulated as a mutual fund.

Now, I assume that they'll get their exemption or otherwise find a reasonable way around this -- but it begs the question, what are they going to do with our money?

Google now has about $14 billion in cash -- that's more than 10% of their market cap. [Correction -- it's actually $10 billlion as of the end of June, sorry -- see comments] They have excellent profit margins and still more than 100% earning growth, and they're continuing to pile up the cash.

So what are they going to use it for? I think we're many years away from a Google dividend, and it would be foolish to buy back shares at this point since just last year you issued those shares at a much lower price (around $300) -- you'd just be paying investment bankers to waste money for you.

I'd still be happy to see Google make some good acquisitions that fit nicely into their wheelhouse -- Akamai's still under $6 billion, for example, a high traffic publisher like CNET would only set them back a bit over a billion (and CNET is much more nicely priced today than it was when I sold a year ago) or some of the advertising competitors like Valueclick at a billion and a half, or even a more traditional advertising agency -- Interpublic, Omnicom, Publicis or WPP Group are all in a price range where Google could buy them with cash, though Omnicom and WPP would be tight at close to $15 billion.

Do any of those really make sense for Google? I don't know -- they have clearly shown no interest in large acquisitions in the past, with the exception of the AOL investment that I believe was designed more to keep their market share than to proactively build the business. They want to grow with their own technology, and make small acquisitions to build services and capabilities -- but they're hiring as fast as they can and expanding with more server farms around the world ... and they still can't spend their money fast enough.

I don't have the solution, but I hope someone at Google does -- the business is great, but use the tremendous opportunity of this extra pile of cash to grow as aggressively as you can ... one needs only to look up the coast to Redmond, WA to see how easily an insular company with a cash hoard and a reluctance to spend it can become stagnant.

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Earnings Season Thoughts (GOOG, WFR, AKAM, ISRG, VRTX)

This is very likely the biggest single day for me in earnings season -- several of my strongest performing stocks like MEMC Electronic Materials (WFR), Akamai (AKAM), Intuitive Surgical (ISRG), and Vertex Pharmaceuticals (VRTX) are releasing earnings after the close today.

So this seemed an apt time to check up on the earnings releases that I haven't yet mentioned.

Yesterday, Cemex (CX) released their earnings -- and no one was particularly happy with them. The stock split recently, but that didn't have any real impact -- no, the impact was from declining US sales. Cemex had great sales increases in every other major area, including Mexico and Spain, but US sales dipped significantly. I found this very surprising, given the continuing cement shortage in this country, but I expect commercial and infrastructure construction to continue growing over the long term here at home, and with the rest of their markets performing very well right now I'm not terribly worried about a blip in the US. In fact, the news out today that GM was buoyed by its Latin American division gives me a bit of hope that consumption is increasing in that region, and any increase in automobile sales should help push demand for improved road infrastructure. That's a bit of a stretch, but at least it's a stretch on the positive side.

And Google (GOOG), another of my larger positions that has already released earnings, surprised me a little bit as well -- not because they continued to beat estimates handily (beat by more than 12% this time), but because it brought in virtually none of the volatility we've come to expect from GOOG earnings.

Google's now trading at less than a 40PE on current year's earnings (reported and estimated) -- that's about as cheap as it's ever been, though it's certainly not cheap in relation to the rest of the market. I sold about 40% of my Google holdings earlier this year at close to a 100% gain and will be holding these, but I think investors are now so afraid of growth stocks and technology stocks that GOOG is getting attractive again -- over the past two years they have steadily increased earnings, kept their noses clean, innovated with new products that may be monetized eventually, and, most importantly, continued to take market share from all of their competitors around the world.

And Gol Linhas Aereas Inteligentes (GOL), another of my bigger holdings, is managing to maintain very solid margins and increase market share even while they grow their fleet considerably and grow earnings by about 50% -- they're subject to oil prices just like all the other airlines (though Brazilian prices are a lot friendlier than US for jet fuel, in general), but they are growing very quickly without sacrificing profitability. The ADRs have been subject to the strength of the Real, and more significantly the shares have been on a rollercoaster as Varig's restructuring has played out ... but I don't see anything happening to Varig that will hurt GOL significantly, and I think the only thing that will bring trouble to the company is a recession in Brazil that curbs demand for tickets.

Looking forward, we've got AKAM, ISRG, VRTX and WFR all reporting today.

WFR is a company I've written about quite a bit recently -- the collapse of their deal with Motech was disappointing, but the cessation of their supply agreement with Evergreen Solar (ESLR) was an indicator of the upward trend in their market, and the signing of a deal with Suntech Power (STP) today to supply solar silicon wafers for ten years in exchange for an up-front payment and a warrant for STP shares came earlier than expected but is also a strong positive.

And today, WFR will release its earnings after the close -- and they've beaten estimates the last two times out, if not by all that much. Analysts are expecting something in the low-40 cent range for EPS, which would be close to twice their year-ago earnings (a year ago is roughly when the company began turning things around and their shares began climbing). WFR has been much higher than this, at around $48 before the bottom fell out of the market, and is priced at close to a market multiple -- for this kind of growth, that seems a more than fair price to pay.

VRTX should be insignificant -- their earnings don't mean much, because no one is buying this company for their current royalties on a few antiviral drugs that are in production now. No, people are buying Vertex for VX-950, their anti-hepatitis compound that has show remarkable results in early clinical trials. Vertex has made some solid partnership agreements in the last few months and is very well financed to complete these trials, so unless there is news about VX-950 or VX-702 (and I don't believe there will be), I don't think we'll learn much from the earnings release.

AKAM is feeling the pain of growth stocks everywhere -- it has gone up so much that it is hard to consider it cheap even on forward earnings. Add in the fact that now many folks are getting worried about Limewire, which has replaced Bittorrent and Google as Akamai's boogeymen, and I expect that the folks who are sitting on huge returns in this one have itchy trigger fingers. Limewire is actually a real competitor, with a similar business plan to Akamai's, but AKAM is so entrenched with their customers and has such a strong portfolio of clients that I think fearing the upstart is a bit premature right now. Still, any disappointment on earnings release this evening -- any worsening of margins that might bring in the specter of price cutting due to competition, or anything less than a big uptick due to heavy World Cup traffic, could bring another wave of selling. With the demand for faster commercial delivery of audiovisual files continuing to increase dramatically, I still think Akamai is a good place to be in the long run ... even if they get some competition in the space they have owned since they acquired Speedera. But it's not a slam dunk, and the shares aren't cheap right now in my opinion.

Intuitive Surgical has been actually fairly quiet lately. In the last few months it has recovered from the beating it took when they lowballed their first quarter sales numbers (especially since they then beat those lowballed estimates handily), but folks will certainly be watching very closely to see how many of the new Da Vinci S machines they sell, and what kind of penetration they're getting into the prostatectomy field (where they're shooting for 35% of the market by the end of this year) and, perhaps more importantly, into hysterectomies, where they are trying to build a presence in a much larger market. I looked into those with some channel checks in the Spring, but haven't followed up yet in any detail since the last earnings release eased a lot of my concerns. This company has the potential to revolutionize all kinds of surgeries in the years to come, but with hospitals generally hurting I'd be happy to see them just keep up with the sales they had in the first quarter -- in the long run, this will be a cash cow with lucrative instrument sales driving returns as more and more surgeries are performed, but in the short run the shares should bump up and down on the numbers of machines sold.

Should be an interesting day -- the next six hours will go a long way to determining whether or not my portfolio will shortly recover from the beating it has taken in the last two months, but so far I've heard nothing terribly disturbing from the companies I own, and I remain quite optimistic about their long term prospects.

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Valueclick short opportunity? (GOOG, VCLK)

For anyone who doesn't watch Seeking Alpha or any of the better Search Engine blogs regularly, David Jackson at SA today posted a very interesting note about Google's new affiliate network that's entering testing. Some of the search engine blogs that noted this as well are here and here.

In short, Google is testing a new AdSense program that would publish what they're calling "Cost Per Action (CPA)" Ads -- ads where the publisher receives payment only if the clicker does something active that makes the advertiser happy. That could be filling out an email form, subscribing to a newsletter, entering a contest, or buying a product or service. I use Commission Junction now, for example, as part of my affiliation with ADVFN, and am paid a small amount when folks sign up for a free ADVFN account from my site, but the program and network are so miniscule in comparison to Google's advertiser network that you can't really compare them.

David believes this is the death knell for Valueclick, which owns Commission Junction (the largest affiliate marketing company/network, or at least the best known). He noted in his post that he immediately shorted VCLK upon seeing this news from Google, though that doesn't appear to have happened across the board today -- ValueClick is actually up today, partly because they announced a fairly big stock buyback yesterday.

VCLK is a profitable, smallish ($1.5 billion market cap) company that's growing pretty quick and has a fairly high forward PE of 20+ that's reasonable if you think their growth will continue. I'm not much of an expert on this business and don't know anything about ValueClick's other revenue streams, but I would tend to agree with Seeking Alpha's founder that if Google moves aggressively to take ValueClick's business, we'd at least have to assume a significantly lower growth rate for VCLK.

David is shorting VCLK, which is something I don't do (I'm not willing to take on the infinite risk of shorting in case I make a wildly bad bet), but I also do notice that VCLK put options are trading without huge premiums -- may be worth picking up some short or long term puts here if you believe Google will move forward with this and eat into VCLK's business, and doing it today might be wise, before this news gets out of the blogosphere and the search engine watcher world and into the mainstream press where it might get VCLK investors nervous. But you're not allowed to blame me if this blows over, or if Google drops this program after testing and it has no material impact on VCLK.

Thanks to David Jackson and Seeking Alpha for this news -- I read it there before I saw it anywhere else.

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I could have made you rich! (GOOG)

Really, all you need to do is look at my short-term decisions, then use as much margin as they'll give you to bet heavily the other way.

That's halfway a joke, of course. I've done fine over the past few years in beating the market handily thanks partly to some good dumb luck, and I don't usually get filled with regret when I make decisions that the market turns against for a short period of time.

But again, with Google earnings out today ... I could have made you some money.

All you had to do was notice when I sold about 30% of my Google holdings to diversify a couple weeks ago when it was just under $400.

And then, being a good contrarian, you would have made a huge bet on Google.

Today, you'd be up by more than 10% as Google released great, analyst-beating earnings once again.

And really, you'd have to figure the odds were in their favor. Google doesn't seem to care what analysts think, but they have clobbered the analyst estimates every time excepting one, it just so happens that that one was last quarter. And now they've more than made up for it.

As I type this and watch the after hours action, Google is trading at about $440.

This is an interesting experience in investor psychology for me, because I hemmed and hawed about selling part of my GOOG holdings for a long time (it was by far my largest holding) before finally selling a portion a few weeks after I passed the one-year holding period. And I still hold the vast majority of my GOOG holdings that I picked up at an average price of around $195, so this blowout earnings report from Google is really great news for me.

But I'm mostly I'm just mad that I did my diversifying a little too early. I've said this before, but sometimes being wrong is infuriating, even when you're making money.

So as I said, I'm a great contrarian indicator sometimes ... I have full confidence that most of the companies I invest in will go up in the many years that I intend to hold them. But I'm getting almost as confident that they'll drop in the few weeks after I buy them (or shoot up in the weeks after I sell).

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Diversifying -- Google Sale (GOOG)

Though I still love Google the company and I still think the stock (GOOG) is likely to have a good long term future, albeit a volatile one, I've long been concerned about my large overweight position in GOOG and am taking advantage of what seems to me to be a reasonable price today to take a little bit of my position off the table.

I was a little surprised at the level of beating that Google took when they mentioned that their growth might be slowing (duh) ... and I have noted before that I wanted to consider lightening my Google holdings if the shares returned to a reasonable price following my one year holding period for taxes.

So today, I sold roughly 30% of my Google position at $395. I hope not to sell any more.

Anyone who has been using this blog as a contrary indicator can, therefore, expect GOOG to rocket back up to $475 within minutes. That's often how the market reacts to my decisions in the short term, I've found.

I did have several readers ask me why I chose not to sell at the high ... and that's sort of a reasonable question, since back in January I was already getting a bit itchy about my overexposure with Google well above $450. But back then I would have sold with short term capital gains, which I'm very, very wary of doing.

I think we often underestimate the impact of taxes on investing -- I have several retirement accounts, but in my larger regular accounts I always consider the tax impact of what I'm doing. In some cases I'll sell to harvest a tax loss in December if I've been considering selling a company for other reasons but have been patiently waiting to decide (as I did with DWRI last year, a company I was much too patient with).

But when I do have significant gains in a stock I am very leery about selling before the one year holding period. The difference between the long term capital gains rate of 15% and my top marginal income tax rate of roughly 31%, which is what I expect to have to pay on my gains this year (hopefully it will be higher next year) is 16 percentage points -- that is a lot of money, and taken in the abstract a very likely 16% gain would be enough reason to hold a stock for a year.

So If I had sold, say, 10 shares of Google that I bought at $200 (to simplify the math) for $475 in January when Google was universally beloved and analysts were pegging it with $2000 price targets, I'd have $2750 in gains. At a 31% rate the taxes would be $850, giving me an overall return of $1900, or 95%.

If those shares could have been held for a copule months longer and still sold at $475, the return at the lower tax rate of 15% would have been $2338, or 117%.

That is a wide enough margin to prevent me from trying to take profits before a year in most cases, even though in this case I would have done slightly better if I had hit the absolute top of the market with my sale than I did selling some here at $395.

But I wouldn't have done much better, and I would have really had to hit the absolute top of the market for my sale, which I have found virtually impossible to do (saving an occasional bit of luck).

Using the math above, today's sale would have been for a gain of $1950 at $395, and I would pay taxes that reduce my actual gain to $1658 -- a bit worse than the $1900 I would have received for selling those shares at the top of the market and taking the larger tax bite.

If, however, I had missed the absolute top of the market by about 7% -- much more likely than hitting the absolute top, In my experience and opinion -- and instead sold at $440 in January, my after tax gains would have been the same as they were today with a sale at $395.

Close enough, and enough ranting about the importance of short-term capital gains taxes.

This sale is something that's been bouncing around in my head for quite a while -- while I love Google's growth potential, the shares that I bought in the $170s and $180s gained well over 100% in less than a year, which is more than I was expecting and, rationally, probably more than the company deserves. Today, with my average Google position at just about a double and the law of large numbers beginning to drag at the market cap, I'm taking a bit more than half my initial purchase money off the table to reduce my exposure.

This decision is primarily about reducing risk and diversifying.

On the diversification point, Google before this sale made up close to 15% of my individual stock portfolio, and I'd like to keep that down to 10% or below for any stock. One way to do this rebalancing is to simply sell partial positions of big gainers and use that money to invest in stocks that seem undervalued, depressed, or undiscovered in my portfolio ... I've got a few ideas in mind for this money.

And on the risk front, I do occasionally take portions of winning positions off the table in order to reduce my exposure and recover some of my intial investment -- I did so with Vertex and Middleby a little while ago, even though I generally really don't like selling. I am especially inclined to do this with shares that have a margin component in my portfolio, as VRTX, MIDD, and GOOG all do -- reducing risk of loss on borrowed shares is more critical than in the shares held in my cash accounts (I only use margin for about a third of my portfolio).

I do expect Google to be a dominant company in the world for many years to come, but I also have some concerns about competition with a reinvigorated Yahoo, MSN and Ask.com, and about valuation. Google is obviously never going to look cheap, but I do think they're coming to a point with their increasingly large need to invest in new markets, people, and technologies where there are likely to be additional speed bumps along the way.

I have no intention of selling my remaining Google position, which I'm now holding at an average purchase price of about $194. Barring any shenanigans or unexpected problems with the company or management, I'll be holding these shares for many years.

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Google's Just Trying to Help! (GOOG)

OK, now this is one of the sillier wordings I've seen in a press release in a while.

Google (GOOG, as if you didn't know the ticker by heart) announced after the trading day ended today that they're going to be issuing yet another stock offering to raise a couple billion dollars in cash. Certainly not the end of the world, though as I did last time they issued shares I question why Google needs the money today with the amount of cash their business already spits out. They used the regular boilerplate language in the release to say the money will be used for general corporate purposes, possible acquisitions, etc. ... but the fun part was in the beginning of the release, when they wrote:

"This offering will partially meet the anticipated needs of index funds to purchase Google Class A common stock when Google is added to the S&P 500 Index."

Oh, how can we thank you, Google! What were those poor index funds to do before these extra GOOG shares became available -- how bereft they'd be without the easy availability of Google shares for purchase!

Oh, wait ... Google shares are available for purchase, in plenty of quantity, every day. In fact, about three times as many shares as they're now planning to offer change hands on the NASDAQ every single day. Index funds would have had no trouble buying enough shares to meet their index targets ... it's just that they'd have to pay a little more for them because of increased demand and constant supply.

I'm not particularly upset -- it's fine that Google needs money to make acquisitions because they're terrified of Microsoft's massive cash hoard, I just hope they spend wisely as I believe they've done in the past (yes, I even think the AOL deal made good sense for them, and I'm very pleased with their smaller acquisitions like Writely).

But please, don't sell us that line of hooey -- they're trying to time the market by issuing this offering after a nice runup in the shares, so just say so ... Google has clearly had no interest in cozying up to Wall Street since they went public, it's certainly not believable that they're trying to do the index fund managers a lucrative favor today.

At least we get a little comic relief to accompany the 3% drop in share price after hours. In my heart I actually blame the little after hours drop on the fact that I briefly considered paring a small part of my GOOG holdings today and decided instead to hold on, but perhaps I'm overstating my own influence.

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Google Finance Beta

For the eight people who read this blog who haven't already noticed it, Google released their beta version of a finance portal this morning (here's the Click Commerce page). David Jackson at the Internet Stock Blog did a great job of summarizing the features and the sources for Google's data, you can find his writeup here.

Although Yahoo is likely to incorporate some of these features shortly especially the interactive charting with key news release dates noted on the chart, I'm very pleased about the amount of data Google has been able to cram on one page. While there isn't anything here that you couldn't also find elsewhere, they've done a relatively elegant job of combining a lot of the critical things you might look for in a thumbnail sketch of a company -- basic company financials and operating ratios, key personnel, company profile, etc. Yahoo makes you click to several different pages to get an overview of a lot of these items, and while you'd need to dig deeper than this into any company before buying shares it is nice to see a fuller thumbnail available here.

And of course, Google has incorporated blog searching in this, which I hope will be a valuable service as the number of excellent financial bloggers grows, and they're using their own Google groups instead of the much more widely used Yahoo Finance Message Boards. The Yahoo Boards are almost entirely intolerable (and intolerant), so hopefully Google can grow their Groups into a genuine competitor -- I'm willing to give them a try.

Finally, one nice tidbit -- I like that Google has included both PE and forward PE on the brief snapshot at the top, that should help to minimize confusion and let us compare apples to AAPLs.

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Bear Market Blahs -- Where to invest now?

Well, when the market as a whole is taking a tumble like it's doing this week, and my portfolio is almost entirely awash in red, it's hard to get motivated to think about your holdings.

Some are still doing quite well ... PDL Biopharma (PDLI -- click to register for free RT streaming quote)got a fair amount of attention around the time of its earnings release last week -- they would have had their first quarter of positive earnings if not for some one time charges, and forecasts are for real-life earnings in 2006 that will give PDLI a PE ratio for the first time. Always exciting for a biotech. Business Week recently came out with a PDLI article and they make a few good points -- principally that PDLI, though risky, should generally be considered less risky than many similar early-stage biotechs.

And Northern Orion (NTO) continues to steam ahead, enjoying the wonderful tailwind of low-cost mining production and very high copper and gold prices. That one will ebb and flow with the commodity pricing over the next several years until Agua Rica is online -- though some folks think they'll be bought out before then so a bigger company can get their hooks into Agua Rica. Either way's fine with me, this is my only real metals investment and it seems to be doing just fine.

But nearly all of my holdings are tanking this week. Tough news on interest rates is rough on the market as a whole, and especially on the more volatile sectors that I am fairly heavily weighted in like emerging markets, growth stocks and the like. Some of these companies I find tempting for additional investment during this general decline ... GOL is down about 6% today, a rough give-back of most of their recent gains ... ISRG has had a horrible month and is now extremely tempting for another add-on purchase. But I've already committed so much to these two stocks that I'm wary to double down again just yet.

On the flip side, this is the worst time to offload most of my holdings (though I may soon sell Overstock, for reasons I've covered recently, and if I wasn't overly patient I would have already lightened up on my Google position a little -- too bad I didn't foresee their ridiculous problems of the last few weeks). When the market's taking a dip like this, seems to me that it's time to look for new investments that might be going on sale. Here are a couple that I'm thinking of at the moment:

Options Express (OXPS). I've had my eye on this one for a little while as it has had an almost unmitigated upward trajectory. I like a lot of things about the company. I think they're in a great business as options trading is climbing dramatically worldwide, and should climb faster if the market becomes more volatile in the coming year as many people expect. They have a fairly distinguished product that is substantially different from what the major online brokerages can offer for options trading. Though a fairly young company, they are very profitable even though they trade at a current high PE. And they have huge insider ownership, which I always like to see. Insiders have sold a lot of shares recently which is not terribly surprising since they've just completed their first year as a public company, but that's certainly an area of concern to investigate. They also pay a small dividend, which is a nice treat.

Oh, and did I mention that they're getting clobbered today? Down close to 10% as I write this after announcing what I can only imagine are weaker performance numbers than expected. I see that their performance is still up dramatically YOY but down from last month, which might be the reason for the current panic -- I am interested in picking up shares but need to do some more research first. If the price keeps plummeting the dividend yield will be up to 1% in a few minutes.

Markel Corp. (MKL). Markel is a big insurance underwriter, and a lot of folks think of them as a junior Berkshire Hathaway (not unlike White Mountains). Like Berkshire (and Google and others) they haven't split the shares so the stock price is up north of $330 at the moment. And this week, Markel is one of the few companies I'm watching that isn't dropping like a stone.

Markel had a tough 2005 business-wise, as did all the big insurers with hurricane exposure. It now seems like it might be a reasonable time to re-purchase a MKL position for my portfolio given the firming prices for P&C insurance and Markel's excellent investment performance. I owned MKL for a while, selling back in 2004 at a small loss when they weren't doing very well, but they're looking appealing again. Like BRK, they have a large cash hoard (though much smaller than Warren's, of course) and have some solid float performance that gives them free money with which to invest. This would be a nice counterpoint to much of my portolio, given that MKL focuses on value investing in equities with their float. Haven't done much research ye to reacquaint myself with MKL after a year or two of absence, but I've got their latest filings and conference call transcripts to pore through and I'll see if I like what they're doing. 2006 is expected by analysts to be a very solid year for MKL, giving them a forward estimated PE of about 12 ... if I can have faith in those numbers, I think now is a good time to pick up some MKL holdings that I can stash in a retirement account and hopefully ignore for a good many years.

Will let you know if I take any action on these or other ideas that are mulling around in the back of my head.