The Real Story: Through the Past, Lightly
Yeah, we all need someone we can bleed on
Yeah, and if you want it, baby, well you can bleed on me.
-- Rolling Stones
With apologies to Mick and the (cough, cough) boys, the above lyrics sum up my attitude towards readers' feedback. I've got thick skin and expected a barrage of negative comments regarding my articles over the past month -- especially since most of them took bearish stances on individual stocks.
I'm sure that day will come. But so far, most of the emails have been very positive. Even the ones that weren't especially supportive were still thoughtful and contained insightful questions.
I am treating the picks in the column like a portfolio -- continuously monitoring the stocks I recommend or pan, and providing you with periodic updates. The performance figures are based on the closing price of the stock on the day my column ran.
Lamar AdvertisingLamar Advertising (LAMR) is up a hair since my bearish column on Jan. 5. Admittedly, this is a stock that I have been frustrated by since I issued a sell rating last summer when I was with Avalon Research. The stock just refuses to roll over. Lamar releases its fourth-quarter and full-year results on Feb. 21 before the open. The street is expecting earnings per share of 6 cents on sales of $250.5 million for the quarter. Looking ahead to next year, the outdoor advertising company is projected to earn 60 cents a share on revenue of $1.08 billion. I will be especially interested in seeing what Lamar's occupancy rates are as the company has touted the potential to "blow through the norms" for several quarters. So far, there's been no blowing, more like creeping -- up to the norms, not through them. Here's a sample of the feedback I've received on Lamar: There is considerable debt. All the growth comes from acquisitions, which history tells us eventually is a losing proposition for stock appreciation. But, the mutual funds and analysts love this thing. They never have a bad word to say, even when they disappoint year after year. I usually buy small put options around earnings time and collect when the stock disappoints, but the price always seems to bounce back. How long can they keep it afloat -- probably until the next recession, when it will be a fabulous short. Good work.
-- W.F. from Louisiana W.F. is correct that the street loves the stock and is probably the reason why it always bounces back. I still believe Lamar's problems are significant enough that the stock should head south even before the next recession.
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