BUYING BETTER EARNINGS

SC

SC reported strong results (what else is new). I have been looking at this one for so long and I never pulled trigger due to valuation. I guess there is a reason for premium. The company is nothing but consistent. Consistent growth (EPS 15%), strong cash flow, clean balance sheet, strong management, dominate market position. There are not many weaknesses. Reluctant as I might be, I may nibble some today. Picked some at 40.80.

KFS

I put a bid at 20.75 and let see if it gets filled. Although I am positive of the stock (positive earning surprise, numbers increased, dividend), I do have a couple of concerns. One is the industry. I hate the auto insurance industry. Revenues (premiums) are heavily regulated, while expenses (claims) are hard to control, not to mention fraudulent claims, plus bad weather (in Canada), and on top of it, competition is fierce. KFS is also very inconsistent. These negatives are partially mitigated by its relatively lower valuation.

TMY

TMY provided an update last night and I do not like it. It appears it has lowered its production guidance (from 5000 to 4500-5000), cash flow guidance (from 2.0 to 1.7-1.9) for 2005. Also it had a couple of operational problems. Is this a cockroach-story?

ATD

ATD fell of the cliff over the past few sessions, with above average volume. This appears rather ominous.