Second Round of MFI

The time has come for my second round of MFI picks. So, here they are:

WNR: Western Refining produces fuel in West Texas, Arizona and New Mexico. The company recently announced the buyout of Giant Industries, which I think is now their only source of debt. They first went public in January at ~ $18, now trade for ~ $22. Insiders have recently bought a ton of shares, and I got to buy at a lower price than they did.

ASPV: I had seen articles about this company when I started investigating my new purchases a couple of weeks ago. I was really excited about Aspreva: they are a drug company that takes approved drugs and determines whether they can treat new indications. Then thstreet.com published an article on them, and the share price shot up about 10%. I'm only a little less excited. They are a profitable drug company which is probably very undervalued: their PE is ~ 8, compared with other profitable drug companies like Genentech (PE = 53!), Bristol Myers (PE = 16), GSK (PE = 18) and TEVA (which sells generics of drugs, like Pfizer's Zoloft, PE= 234!). Insiders haven't bought recently, but they already own ~ 65% of the company! How much more could I hope for them to buy? Debt is less than 1% of their cash on hand, and they've got a (small) pipeline for new products. An exciting company.

ASEI: They make x-ray machines that are used in airports. Some of the various machines that they produce are supposed to detect all sorts of prohibited items. Unfortunate that this is a growth industry, but it is. This company was a Hidden Gem bonus pick several months ago, when it was at $69, and originally it was a Rule Breaker pick. They've reported less-than-predicted earnings lately, and that's made the stock price tumble. The lumpy earnings is supposed to be normal in the industry, but Wall Street responds in the short term, so one poor quarter makes this a buying opportunity. Also, I'm not quite sure how to interpret non-open market purchases by insiders, but ALL of the principals bought at over $50 in June.

PWEI: They make pipes and fittings for commercial and industrial plumbing. A perfectly boring industry! Just like Lynch recommends. BUT a hedge fund is buying tons of the company, and really shaking the boat. AND they're called PIRATE Capital - how much better does it get? This hedge fund is apparently known for shaking things up in order to increase shareholder value. On top of that, the company authorized a $40M buyback despite the fact that the share price has gone up nearly four-fold in about the last year. It's gone up that much, but the board still thinks its so undervalued (PE is under 5!) that the best way for the company to increase shareholder value is to buy back shares? That's encouraging.

UEPS: They're bringing debit cards to underdeveloped societies. Seems like a lot of growth is possible. Debt is nil, insiders hold 31.3% and one of the diretors recently bought a ton more. Looks good.

A couple of notes:

It will soon be time for my next round of Hidden Gem picks, so stay tuned! Also, it was announced that the second-to-last hurdle for the PAY acquisition of LPMA was cleared: the DoJ said that there are no antitrust concerns. Now as long as all of the shareholders vote the right way... Finally, BLD was in a slump, but then an analyst ranked them as a strong buy and they shot up! From about -12%, they are now about +2%. In all, my initial 5 purchases are up ~15% total.