RealMoney's Blog Watch

I'm a fan of Yankee Candle (YCC - commentary - Cramer's Take) and have written about it as an activist play. The blog Value Discipline has a summary of the pros and cons of investing in Yankee Candle. It's a great post in that it goes through the basic numbers and demonstrates that cash flow is going up but growth seems to be declining. It then summarizes why Wall Street appears to be waffling and offers the pros to investing:

Because of the strong free cash flow, the company has returned capital to shareholders with a $100 million share buyback in 2003, followed by two subsequent $100 million annual buybacks. Its fourth buyback program, initiated in 2005 now of $150 million, I understand is more than half completed at this time.

Operating margins are quite impressive at around 22% and return on capital has been very strong at about 27% for last year, though this is down from the last couple of years where ROIC was 32.5% and 39% respectively.

At a current market cap of $1.23 billion, and an enterprise value of $1.4 billion, this business is selling at only 10.3 times EBIT. From a free cash flow standpoint, the business is selling at a FCF yield of 7.5%.

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Some insights from The Onion (by way of Crossing Wall Street) on the recent slip in Google's (GOOG - commentary - Cramer's Take) stock price.

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The blog DeepWealth delves into the question of What Is Value Investing?

Most people consider Warren Buffett to be the premier value investor but, as convincingly argued in this underselling tome, that couldn't be further from the truth.

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I knew that it was time to get out of the Web site development business when they started teaching kids in high school how to do HTML and basic Web programming. Activities that in the heyday one could charge up to $1,000 an hour for were now going to become commodities.

Could the same happen in investing? This interview with Henry Lu of Blast Invest, is interesting not only in what Henry has to say, but also in that the interviewer is only 15.

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Barry, I'm going to test this hypothesis because I don't think it's true. Specifically your statement: "this [lower short interest] is a longer term Bearish contrary indicator. Rallies very often get started via short covering rally -- no shorts, less rally."

Dinner on me if I'm wrong (unless you abhor the thought of having dinner with me).

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I started a VC fund in March 2000 (hey, I'm not a market timer) funded by Investcorp, CSFB, UBS and Wachovia. In June 2001, Investcorp decided to bring the fund in-house and let go of some of the employees. I took everyone out to see the movie Startup.com, which followed the rise and fall of dot-com company GovWorks. It was a bad choice in retrospect, as everyone was fully depressed.

It's interesting to see what happened to that GovWorks guy.

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James Altucher is a managing partner at Formula Capital, an alternative asset management firm that runs several quantitative-based hedge funds as well as a fund of hedge funds. He is also the author of Trade Like a Hedge Fund and Trade Like Warren Buffett. At the time of publication, neither Altucher nor his fund had a position in any of the securities mentioned in this column, although positions may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback; click here to send him an email.

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