IRA Investing: Still Long-Term Bullish

URS Corp. (URS - commentary - Cramer's Take) remained on the screen for the second month, so it will continue to be held for at least another month. The other four stocks were sold. These included Century Aluminum (CENX - commentary - Cramer's Take), DRS Technologies (DRS - commentary - Cramer's Take), Keystone Automotive (KEYS - commentary - Cramer's Take) and Lionsgate Films (LGF - commentary - Cramer's Take).

The four stocks purchased were: Nova Chemicals (NCX - commentary - Cramer's Take), PepsiAmericas (PAS - commentary - Cramer's Take), Schweitzer Mauduit (SWM - commentary - Cramer's Take) and UAP Holding (UAPH - commentary - Cramer's Take). These will be held until at least Aug. 16, 2007.

I sold two other stocks last week. Amerisafe (AMSF - commentary - Cramer's Take) was sold because I had held the stock for seven months, and it no longer appeared on my screening system as a buy. Similarly, Ameriprise Financial (AMP - commentary - Cramer's Take) was sold for the same reason. Full disclosure: I own AMP in another taxable account and will continue to hold at least until my gain is classified as long-term.

I took a new position in Elizabeth Arden (RDEN - commentary - Cramer's Take). This is a cosmetics company that has been showing solid growth at around 15% in revenue. However, earnings have not kept pace until the most recently reported quarter, having been held back by the integration of recent acquisitions that are actually doing better than planned.

The real challenge for the company is to increase margins that are substantially below other cosmetics companies. At current prices, RDEN sells at an enterprise value/EBITDA ratio of 9.8. This is about a 20% discount to the median company in the personal products industry that sells at 12.1 times. Other valuation measures are similarly well below industry averages.

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At the time of publication, Moore was long American Dental Partners, Apria Healthcare, Cal-Maine Foods CF Industries, Consolidated Graphics, O'Charley's, Columbus McKinnon, CGI Group, Integramed America, JDA Software, Kinetic Concepts, Layne Christensen, PARAXEL, Quadramed, Elizabeth Arden, Scholastic, S&P Depository Receipts, TBS International, Boots & Coots, W-H Energy Services, Warnaco Group, Nova Chemicals, PepsiAmericas, Schweitzer-Mauduit, UAP Holding and URS, although positions may change at any time.

Richard Moore, CFA, has 40 years of experience in various facets of the investment business. He has been employed by banks, mutual funds and investment advisory organizations during his career and has also owned retail and service businesses. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Moore appreciates your feedback; click here to send him an email.