Monday, July 30, 2007

Continuing to Build

Ok so maybe my portfolio is going to be larger than 10-12 picks. The initial five picks of PG,PEP, LVS, F, & ABX were all up today. Much like everything else for that matter but Ford did pace the way with a gain of 6.2%. This jump may have been because of a Saturday report that Ford may have a potential bidder for their Jaguar, Land Rover, and Volvo brands but this may be a short lived rumor. Barrick Gold (ABX) and Las Vegas Sands (LVS) also made nice gains of 4.07% and 3.01% respectively.

Not a bad start. But notice that none of these choices is overly aggressive. The market has been unsteady at best, swinging violently in the last few weeks, with the end of last week being particularly ugly. I'm avoiding Financials altogether at this time. With the possibility of the end of the Leveraged Buyout boom looming and the subprime mess, it's just not the place to be.

My three new picks for my portfolio are Allergan (AGN), Quest Diagnostics, Inc (DGX) and Transocean (RIG).

There are just no wrinkles to Allergan, the maker of ever so famous Botox wrinkle treatment. They just split their stock in June and are going to be seeing increased competition in the Botox arena from the likes of Johnson & Johnson but for now the company should be able to meet or exceed expectations for the quarter based on the sales of Botox and their acquisition of Inamed, a maker of obesity treatment device and a line of breast implants. Now you can have wrinkle free breast implants!

Quest Diagnostics is a provider of diagnostic testing. It does so by offering physicians access to it's network of diagnostic laboratories. It also does gene-based testing and testing of drugs for abuse. Second quarter earnings were slightly above expectations and the company raised their bottom line estimate for the year. Wall Street estimates only match the companies bottom number. I feel that the company will easily match and beat analyst estimates for the rest of the year based on cost cutting measures and acquisitions.


Transocean (RIG) is drilling for the black gold, the black gold that is in the deep water. In fact, they are the best at it. It recently announced a merger with GlobalSantaFe to create a company that can drill shallow to ultra deep water all over the world. Now the only scary part in this deal is the 15 billion in payouts to shareholders that is being financed through a bridge loan. We have seen recently with Chrysler that financing is getting a little harder to do. This is a good marriage and we should be able to reap the benefits in the near future.

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