Warren Wednesday: H2 1961

Getting back on track with my Warren Wednesday series on the actual Wednesday its to come out...

H2 1961
Written: Jan 24, 1962
Length: 11 pages
Source: RPCPA.com
S&P 500 return for all of 1961: +23.13%
Buffett's return for all of 1961: +45.9%
Major events: Construction begins on the Berlin Wall. 
Roger Maris breaks Babe Ruth's home runs in a season record. 
The book Catch-22 is published. 
The Vietnam War begins for the U.S.

This letter right here is exactly why I wanted to read his letters. He really gives us a big serving of meaty portfolio management ideas. Buffett discusses how he breaks up his portfolio.
1: "Generals": Undervalued non activist securities: Companies he is passively invested in with no specific time table on when they want to sell.
5 large positions (5%-10% total assets) and 10-15 smaller ones.
He discusses how his timing of purchase is better then the timing of sales. Isn't that the truth. It is one of the few things you can control. When you get into a position and at what price.
These generals won't outperform the Dow by much but over time of several years they should.

2:  "Work-Outs": Positions requiring corporate action to unlock the profit potential. Well we have our answer as to what a work-out is that first came up in the 1959 Warren Wednesday. 10-15 workouts at a given time. Buffett mentions that he will borrow money for this section of the portfolio and I get the impression that this is the only reason he would.

3: "Control": Positions in which they control the company itself or have a big enough position to be an activist. These positions he wants to have nothing happen for possibly years while he buys up more to increase his position. Then the big payoff comes similar to the Sanborn map business from the 1960 letter.

I find this interesting that he is famous for telling people to go with your 6 or 7 best ideas because your 8th idea won't make as much money. Yet here he is in 25-30 positions excluding their "control" activist positions. It's important to keep in mind though that a person's strategy and process will change over time. For Buffett, he had a big change when Charlie Munger enters the picture. Though they met in 1959, Munger will gain more and more interaction and work with Buffett over time.

To me it appears he breaks up his portfolio based upon how much work he has to do and how much control of that work. The generals are pretty passive. Work-outs are activist that he doesn't have control over so presumably he has less he can do. Control obviously is where he is sitting on the board of directors and having to spend his time with.

On the topic of conservatism in how he doesn't jump in to high P/E companies because the market is moving up...

You will not be right simply because a large number of people momentarily agree with you. You will not be right simply because important people agree with you. In many quarters the simultaneous occurance of the two above factors is enough to make a course of action meet the test of conservatism.

You will be right, over the course of many transaction, if your hypotheses is correct, your factors are correct, and your reasoning is correct. True conservatism is only possible through knowledge and reason.

Dempster Mill Manufacturing. Buffett reveals they own 70% of the company and that there are only 150 total stockholders. To me that's very risky as there is no liquidity here to exit a position if one so wanted. His cost basis is $28 a share and book value is $75. That's quite a large margin of safety so I can understand why he went in heavy. This one position accounts for 21% of all partnership assets.

Later in this letter he again goes over their strategy of matching or struggling in a rising market but beating the Dow in a declining market. He mentions something I think is important. That his partners fully understand this not only in their cerberal regions but also in the pit of their stomach. Psychology in investing and trading is so huge, far more important than most people think. You can say you will do one thing or follow one strategy then it get tested by the markets and you fold like a house of cards.

All in all this was a great letter. I find Buffett's ideas of portfolio management as similar to mine: broken down by my work load.

My rental is managed by a property manager and I am in contact with them about every two weeks for various things however it's for getting my input and permission for various requirements.

Next is Lending Club which I just run my screen and pick some notes. Then wait for the payments to add up alongside a deposit before I buy again. This amounts to perhaps 30 minutes every two weeks.

Third is dividend investing taking up a bit more of my time in reading and researching how they are doing and looking out for any news worthy events.

Lastly is Forex. I do plan to return to it at some point but as it will be taking up most of my financial time I need to finish college first so I can have a clear head.

So I have to admit I take a little pride that I am doing some of the things Buffett did. I won't be shadowing him, that would be disastrous but the underlying concepts of what he did and why he did them is what I am after here to learn about.

Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

What Lending Club is NOT

Before I get to my entry on my strategy and how I screen for loans, I wanted to talk about what Lending Club is not. There can be some misconceptions about it that I feel needs to be cleared up.

Lending Club is NOT usury.
Usury is the practice of giving a loan at immoral interest rates that the borrow cannot afford but is in no position to say no. i.e. payday loans. Going into Lending Club this was something very important to me when I saw loans went up to 25% or more in rates. Am I causing harm to people who are not in a position to say no by placing them into a worse financial situation than they already were? Would I be guilty of causing the same problems that banks did with the financial crisis of 2008? It's not important to many out there, but it is to me.

When we look into what the needs are of borrows we can see that about 75% are either debt consolidation or to pay off credit card debt. Time and again the comment section from the borrow is the same. "I ran up debt in my 20s and didn't know what I was doing. Now I have $30,000 credit card debt. I can make my payments but am not getting ahead. This loan will lower my monthly payment and free up money to start taking control of my financial life."
From that aspect I am doing these guys a favor. They are paying $7,500 a year on their 25% rate $30,000 credit card debt. Their LC loan of 18% is only $5,400. That's freeing up $175 of their monthly pay that they get to keep instead of going to a bank. This is exactly the sort of first step a family would need to turn their financial life around. $175 a month is a great start to an investing account or paying off debt quicker.

You aren't really getting 20%+ yield on your investment.
The other big thing to keep in mind with Lending Club is that you won't end up getting the yield that the loan offers.
First off these aren't qualified dividends taxed at 15% you probably are going to be paying more.
Second, Lending Club is a business and needs to make money. They make that by charging fees. In 2009 I had about a 3.5% fee on average a month though I had been selling notes on the secondary market which does have extra fees then the primary one.
Third is the secondary market mark up fee from the seller. People can charge what they want when selling their notes. If you don't want to play the F5 refresh spam game and try to beat the robot investors to fund a loan on the primary market then you have to buy notes on the secondary market. You can get some good notes with a 2%-4% mark up. That is going to lower your actual return.
The fourth reason you won't be getting the full yield on the loan is you will get less interest is if the person pays off the loan quicker. We get the interest rate of the loan on the existing principal left in the loan. If they pay extra on their loan that is less interest in the future and less profit. I enjoy seeing people get out of debt asap but it does hit your bottom line and is something to keep in mind.
Fifth and probably most importantly, you WILL get defaults. People who stop paying and your money is gone. Lending Club does a good job of following up and trying to make a payment plan with people missing payments but they aren't a collection agency. If the money is gone we are out of money. Defaults rates can be 4% or more.

The long term average for all investors with Lending Club that have 100 notes or more is 8%-9%. The 100 notes requirement is important because at anything fewer you can be really lucky with no defaults or really unlucky with a lot of defaults. Over time however, the law of averages works in the investor's favor.
Lending Club is not a get rich quick 20%+ consistent profit scheme. Its a making money slowly but surely scheme.

Lending Club has restrictions and not all investors are eligible.
As I mentioned in my previous entry, Lending Club has restrictions. Its important to keep in mind these arent Lending Club rules they're federal and state government rules about funding loans. You need to have $70,000 in annual income AND you need $70,000 liquid networth excluding your home. Additionally its only available in 27 states, two of which (KY and CA) have tougher restrictions.

Even with the above concerns and things to keep in mind, I feel Lending Club has a lot to offer and it has a place in my pre-retirement portfolio. Next I'll get into how I screen for loans and my strategy for investing with Lending Club.

Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

What is Lending Club

Last month I mentioned that I am returning to Lending Club as an investor and that I would be talking about it in February. I have made a couple deposits, done my research, and picked up some notes so want to share some finding and thoughts.

Essentially, Lending Club is a peer-to-peer money lending service that connects your average person needing money to the average person that has money to lend.
More detailed, a person applies to LC for a loan. They fill in their personal information and LC runs a credit check on them, reviews them, and if they are of prime credit score or higher they will set an interest rate ranging from 4% up to 27%. The requested loan can be in two durations: either 36 months or 60 months.

Now Lending Club does not give them the money themselves. They are merely the middle man. LC then turns the loan over to the community and opens it up to funding. That funding comes from the other users of Lending Club. In as small amount as $25, people can crowdsource the loan. Think of it as Kickstarter but your reward is getting paid back with interest. If there is enough funding to fulfill the requested amount of the loan then the person gets the money and the investor gets a note.. If the loan was for $30,000 and you put in $25 you now own 1/1200th of that loan. It can be held or sold and it will get 1/1200th of the monthly payment of the loan, which ends up being about $0.60 - $0.70.
Lending club takes about $0.01 from a $25 note as a service fee which roughly equates to 1.5% from a $0.65 payment.  This is paid by the investor as it's taken from the loan payment before it gets put into the investor's account.

There are actually two different ways to invest with Lending Club. The above description is their primary market where loans get funded. There is also a secondary market. Once you have your note it is an asset that can be sold to other people. If you have ever played an MMO and dealt with an auction hall then you have a pretty good idea of what this is about.
The secondary market is where I will be investing with Lending Club. I'll get into my specific ideas on strategies in an upcoming entry.

I first encountered LC in 2009 and back then I wasn't impressed but they were new and still trying to figure things out so I left as an investor and figured I would give them some time. Looking at them today they have changed some for the better and some for the worse.

What's better with Lending Club...
They are now more up front about the whole $70,000 income requirement. In 2009 I had to really dig deep to find this rule. Actually, I don't see it discussed very often these days so I will probably bring it up several times. The federal government requires a person to have $70,000 of yearly income to fund loans. That's not a Lending Club rule, that's a Washington D.C. rule. Presumably it's because "the poors" don't know how to calculate the risk of a $25 note and its for their protection. These days though I see it a bit more in the open at LC.
Now the secondary market is a different case. Over the counter secondary markets of selling assets isn't something that Uncle Sam seems to care about and that has no restrictions federally though it might per state. Double check if LC is available for your state.

They now offer tax forms. In 2009 they did not give you tax forms to help with you income taxes. I knew from my dividend investing that payments are income and it gets taxed. I even called LC and talked with one of their reps. I was told that they don't report income unless its $60 from a single source. That being an individual note. I asked about a $600 account limit which is pretty common for 1099-MISC forms. They didn't know anything about that. I then asked what if I had 10,000 notes each giving $0.65/month... that would be $7,800 of payments surely that would be reported. It wasn't and I was told I am on my own to calculate it what portion of the payments is a return of capital and what is actual interest. That was actually the final straw with me and I sold all my notes that week because if they weren't taking taxes seriously what else were they not serious about?

Their portfolio reporting and number crunching is more extensive and more open than before. When I was first with them they didn't offer much in the way of reporting tools for you to evaluate how you are doing. They had a net return but it was vague and involved reinvesting all your money. These days they have a lot of reports and charts to help you figure out how you are doing.


What's worse with Lending Club...
Institutional Investors. Big money has noticed LC and is stepping in. So much so that loans get funded within minutes of being applied. This is bad for a number of reasons. One, there is no question and answer back and forth with the person applying for the loan. In 2009 not all loans get funded and it often took days to get funded. Investors could ask questions like "Why did you have 12 lines of credit closed last year?" or "Why didn't you go to a bank to apply for a car loan instead of using LC for an 18% loan for a motorcycle?" Then the person asking for the loan would need to respond. Institutional investors just put in the criteria of what they want to fund and then dump tons of money into loans. The idea is that it doesn't matter what quality of loan you do as long as you hit volume it would make up for defaults. Yeah talk to pre-2008 banks about that idea. I rarely see any questions in funded loans these days.

This causes a second problem, retail investors have minutes to review and fund a loan before its completed and you miss out. I am reading that some people spam the refresh key at the four times of the day loans are released.
Luckily though the secondary market doesn't have these problems though it has others that I will discuss in my strategy entry.

All in all, I am pleased with how far Lending Club has come along. I like what they are doing, their business model, and the chance to get access to double digit yields. For the time being, I plan to run Lending Club as a side test part of my portfolio until I get 100 notes and can get a feel for default rates and actual return. Its easy for LC to say I will be getting 20% yield... before defaults come into play. I have plenty more to say in the near future about Lending Club.



Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Warren Wednesday: H1 1961

Quite a hectic time for me right now and thus a delay in Warren Wednesday. I'm doing the online college thing and work seems to be blowing up with mergers of teams. It's been quite the distraction but it also has reinforced why I am focusing on learning about investing: to become financially independent.
Thusly this Warren Wednesday is for last Wednesday and I'm sticking with the schedule.

H1 1961
Written: Jul 22, 1961
Length: 3 pages
Source: RPCPA.com
Dow Jones: 13%
Buffett's return:
Major events: President Eisenhower gives his final State of the Union address and warns of the power of the U.S. military-industrial complex. 
Two B-52 bombers carrying nuclear weapons crash in different accidents in the U.S.
23rd Amendment to the U.S. Constitution allows Washington D.C. residence to vote in presidential elections. They however do not have representation in Congress.
Bay of Pigs invasion of Cuba fails.
President Kennedy announces the U.S. will put a man on the moon by the end of the decade. In related news record shipments of coffee and antacids are ordered by NASA.

Warren changes over to a twice a year letter format starting with this update. He stresses that 6 months is far too short a time to measure success and would prefer to look at a 5 year time frame. Thinking about the average person today... there is no way that would be tolerated by investors and people would be pulling money away from him.

Normally I calculate the return for the S&P but I have done that yearly not half a year so will use Buffett's own comparisons on his performance. He cautions that if things keep going like they did for the first half year then he probably won't beat it.

He is so long term focused in his discussion here that he mentions a position they have that he hopes does nothing for at least a year. Presumably to buy more shares and this is something I have noticed is a problem with retail investors. We tend to make one purchase and if it doesn't go up we start getting impatient and whiney. My reply is always "So you to planned to never add to your position again? You want it to go sideways to keep buying shares then rise before you plan to cash out."
The responses I usually get is that I am a short seller trying to manipulate the market. I have to wonder if Warren ever had to deal with that.

The majority of this letter was in partnership rules, reorganization and bookkeeping but I still found it interesting to read. Buffett mentions that he is working on combining the partnerships together into one. I read is biography "The Snowball" and know that he was starting up a lot of partnerships. Often they were with different family and friends and it started to get unamanageable. He goes on to discuss how the partnership is split up and discloses some interesting things.
He will contribute 1/6th of the assets placing his personal wealth at stake alongside his investors.
He will not be buying anything else outside of the partnerships.

Perhaps most surprising to me is that he allowed a 6% monthly withdraw rate for people who want income.
For those that don't they can have the money rolled back in to increase their stake. For someone who is so adamant against paying out dividends this had to drive him nuts. He probably didn't have much choice though as these were partnerships and they had a say in what happens to the money. Not in where it's invested but in if it was to be with Buffett or someone else.

New partners needed a minimum of $25,000 to join. That is $195,000 in today's money so this was not a Joe Six Pack friendly investment.

Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Dividend CCC Review: January 2014

Talk of a pullback and fear of emerging market contagion is all around the net these past couple weeks. So much so that I thought I would make it a part of my monthly dividend screen.

This month the Dividend score is: Yield, 5 year dividend growth rate, Payout ratio.
Fundamental score: P/E, Tweed Factor (Yield + dividend growth rate vs P/E), and the % of price vs the 52 week low. Simply put, the closer a stock is to its 52 week low the higher the score. My thought here is wanting to find an undervalued stock but also capital preservation. If something has been beat down already its probably not going to fall much more if the market drops.

Name	Symbol	Industry	Score	Div	Fund
Western Union Company	WU	Financial Services	10	4	6
Textainer Group	TGH	Transportation	8	3	5
ConocoPhillips	COP	Oil & Gas	8	4	4
Chevron Corp.	CVX	Oil & Gas	7	3	4
IBM	IBM	Technology-Hardware	7	3	4
Deere & Company	DE	Farm Equipment	7	3	4
PetSmart Inc.	PETM	Retail-Specialty	6	1	5
Philip Morris International	PM	Tobacco	6	2	4
Rent-A-Center Inc.	RCII	Retail-Specialty	6	2	4
Murphy Oil Corp.	MUR	Oil & Gas	6	2	4
HCC Insurance Holdings	HCC	Insurance	6	2	4
Accenture plc	ACN	Business Services	6	2	4
ExxonMobil Corp.	XOM	Oil & Gas	6	2	4
Target Corp.	TGT	Retail-Discount	6	3	3
Wal-Mart Stores Inc.	WMT	Retail-Discount	6	3	3
Chubb Corp.	CB	Insurance	5	1	4
Triangle Capital Corp.	TCAP	BDC-Financial Services	5	1	4
AmTrust Financial Ser	AFSI	Financial Services	5	1	4
Rock-Tenn Company	RKT	Packaging	5	1	4
Ralph Lauren Corp.	RL	Apparel	5	2	3
El Paso Pipeline MLP	EPB	MLP-Oil&Gas Pipelines	5	2	3
Mattel Inc.	MAT	Recreation	5	2	3
BCE Inc.	BCE	Telecommunications	5	2	3
Occidental Petroleum	OXY	Oil&Gas	5	2	3
BHP Billiton Ltd.	BHP	Mining/Oil&Gas	5	2	3
AFLAC Inc.	AFL	Insurance	5	2	3
Kroger Company	KR	Retail-Grocery	5	2	3
Lorillard Inc.	LO	Tobacco	5	2	3
BHP Billiton plc	BBL	Mining/Oil&Gas	5	3	2
Gap Inc.	GPS	Retail-Clothing	5	3	2
Intel Corp.	INTC	Technology-Hardware	5	3	2
Helmerich & Payne Inc.	HP	Oil & Gas	5	3	2

My screen found a ton of new companies to review. So much so that I crossed off the usual suspects. Small banks, insurance, and China are already off the list so everything left I already own or its new.
One interesting thing I noticed, 5 of my 13 positions that are on the list are in this month's top picks. That makes me feel pretty happy going in to any potential pullback.

Companies quick to cross off...
WU: Previously crossed off. Negative EPS growth.
COP: Already invested.
CVX: Duplicate from existing investment COP. I don't want to go too heavy into a sector and because I keep an eye on my investments I want to keep my research as low as possible.
IBM: Already invested.
PM: I don't invest in tobacco. I hold no ill will or think any less of those of you that do. Just a personal choice.
RCII: Rent-A-Center: Previously crossed off.
XOM: Yet another big oil company
WMT: Already invested
TCAP: Used to be invested. Now I have PSEC and TCPC.
RKT: Already invested.
AFL: Already invested.
LO: Tobacco.
HP: Reviewed last month.

New companies for possible review...
TGH: Textainer Group: These guys take on debt, buy shipping containers, then lease them out. I like it as a play for worldwide growth but not now with emerging markets shaky. I also don't like that their debt is floating rate. Not sure if a 5% yield and 17% dividend growth rate is worth that.

DE: Deere and Company: Heavy farming equipment. They look quite undervalued at a 9.5 P/E from their history of 14. They have a 9.5% EPS growth and 16.4% dividend growth which is quite nice. I'm curious as to why the estimates are for lower EPS in 2014. Their debt/assets is rater high for me at 50%+ but I am not sure if that is standard for heavy manufacturing companies. Like most companies these days they are doing big buybacks. Looks to be about 4% a year. I might have to take a look at DE.

MUR: Murphy Oil: Oil and Gas in the USA and UK. Massive pullback or not, a 1.2% EPS 10 year average for growth is terrible.

HCC: HCC Insurance Holdings: An insurer in the U.S. and parts of Europe. I don't know if I like them in property, casualty, accident, health, surety (insurance on debt), credit, and aviation types fo insurance. That's all over the place. However their growth looks good and they appear to be undervalued at this time.

ACN: Accenture plc: Being a plc we know they are from the U.K. or Ireland. In this case they are an Irish business consulting company. They appear to be at value and I am looking for dividend yield and deeply undervalued stocks.

TGT: Target: I have recently seen a lot of bloggers jump into TGT. While I am already invested in WMT, I am strongly considering selling it. Both companies are quite comparable and TGT has an extra 0.5% yield. However I am concerned that their 2013 EPS seems 25% lower then 2012. Do any of you TGT investors know why? I'll need to find out why and figure out if its temporary.

CB: The Chubb Corporation: Yes that is the company's real name. I was actually invested with them for awhile. They are an insurance company catering to wealthy individuals and businesses. If you look at a chart you can see they have had a nice run since 2009. While they have had a nice pullback and are at their 52 week low, they are significantly over their 10.8 P/E average. Still, their 2014 EPS estimate is 30% higher then 2013 so I would not be surprised to see them up this year.

AFSI: Amtrust Financial Services: Another insurance company. What is it with my screen hitting insurance companies? AFSI has a 1.77% and that is enough to make me stick with AFL.

RL: Ralph Lauren: Never would have thought this would appear on my screen but I cannot let that bias me away from a potential investment. 1.1% yield after a nasty pullback tells me they aren't a serious dividend company. Then again they have a 37% dividend growth rate and only a 17% payout ratio. Perhaps they are. Its 10 year historic P/E is 21. That's a lot of growth expectation and RL has delivered. But if they ever stop and it gets classified as a value company its going to struggle price wise. I'll keep an eye on this one.

EPB: El Paso Pipeline. EPB is a master limited partnership. They have pipelines for oil and natural gas and act like a tollbooth for other companies transporting their energy products. I like that EPB has an 8%. That is about what I would need to pull me away from WHZ or NDRO with their double digit yields. MLPs can bought land and grow so have that going for them vs land trusts that are always declining. However I am concerned why they dropped 20% almost overnight. It has to be more then the January pullback that hit the general market.

MAT: Mattel: I recently was in Hasbro (HAS) so I find it interesting that these guys are showing up. They missed Q4 earnings by a large amount and dropped by 10%. This does though give them a 4% yield and places them back in their historic P/E range. If ever there was a clearer example of watching fundamentals it is MAT as if you look at them on Fastgraphs they keep coming back to fair value. I'll be looking at them closely as with the Q4 miss they are still expecting an increase in EPS next year.

BCE: BCE Inc: A Canadian telecom and cellphone company. 5.4% yield looks nice and they do appear to have had a nice pullback. I'd have to see if they have international exposure. I don't see much growth for U.S. and Canadian cellphone markets. Its not like thats a brand new tech about to sign up a lot of new customers.

OXY: Occidental Petroleum Corp: A large U.S. oil company but not imo part of Big Oil (XOM, COP, CVX). Even with their recent pullback, Fastgraphs shows them overvalued by their metrics and by a historic P/E ratio.

BHP: BHP Billiton Limited: A mining company taht has erratic but overall climbing EPS. Averaging 21% EPS growth a year. This Billiton is out of Australia. Funny storry with BHP and BBL. They were separate mining companies, one from Australia and one from the U.K. They merged but kept their serparate ticker symbols. So they are the same company but their stock behaves differently. Their yields can also differ by 0.5% or so. BHP is interesting in that they are jumping in on the potash bandwagon and working on a multi billion dollar mine. It wont be available until 2017 or 2018 but they are moving forward. Might be a challenge for my POT so I will need to keep an eye on them. They look extremely undervalued and I need to look into them.

KR: Kroger: Grocery store chain. KR is a company I have on my watch list and they score extremely high on my system. Their recent pullback has put them very undervalued. A 2% yield is rough but perhaps this could be a trade vs a dividend investment. A 10% EPS growth rate and a 15% dividend growth rate at least warrants research.

BBL: BHP Billiton plc: The U.K. side BHP. My thoughts are listed above.

GPS: The Gap: With a 2% yield, 6.7% dividend growth rate and a 21% payout ratio they easily have more room to be paying a dividend but aren't. To me that seems like they aren't committed to a dividend so I will pass.

INTC: Intel: Though this is the first time they have been on my screen, I have researched them in the past. They are a value trap that looks good but is struggling. They were too late to get on the mobile bandwagon and have paid the penalty ever since with years of declining EPS.

This month's research screen winner is...
PETM: Petsmart Inc: Lots of interesting candidates for the best company for my screen to research but it goes to PETM. As with RL, I wouldn't have thought Petsmart would be a company I might invest in. First off they have had consistent EPS growth of 13.6% a year with only a minor dip in 2008 which they recovered. Along with pet supplies they also have pet grooming and kennel options. They also have some veternarian options in some of their stores. Their 1.2% yield is at first troubling but then you see they have a 35% dividend growth rate... they aren't afraid to throw cash our way.
In 2007 they paid $0.12 a year and had share price in the low $20s... a measly 0.6% yield.
Today they pay $0.76 a year with a $63 share price a 1.24% yield however thats a 3.8% yield on cost. Oh and a share price rise that outpaces the S&P by a huge margin.
I'll be researching PETM more closely.

For your consideration. Here is an unfiltered list of companies within 5% of their 52week low, essentially at the bottom. Some might be duplicate from above and some are of pretty low quality but for any of you interested in getting decent companies that have dropped by a large amount...

Name	Symbol	Industry	Score	Div	Fund
Chesapeake Fin	CPKF	Banking	8	4	4
Chevron Corp.	CVX	Oil & Gas	7	3	4
IBM	IBM	Technology-Hardware	7	3	4
Philip Morris Int	PM	Tobacco	6	2	4
Target Corp.	TGT	Retail-Discount	6	3	3
CCFNB Bancorp Inc.	CCFN	Banking	6	2	4
China Mobile Limited	CHL	Telecommunications	6	2	4
PetSmart Inc.	PETM	Retail-Specialty	6	1	5
Rent-A-Center Inc.	RCII	Retail-Specialty	6	2	4
W.R. Berkley Corp.	WRB	Insurance	5	1	4
RLI Corp.	RLI	Insurance	5	2	3
Ralph Lauren Corp.	RL	Apparel	5	2	3
El Paso Pipeline MLP	EPB	MLP-Oil&Gas Pipelines	5	2	3
Aaron's Inc.	AAN	Retail-Rental	4	1	3
Excel Trust Inc.	EXL	REIT-Diversified	4	2	2
McDonald's Corp.	MCD	Restaurants	4	2	2
First Keystone Corp.	FKYS	Banking	3	-1	4
Syngenta AG	SYT	Agriculture	3	1	2
Brady Corp.	BRC	Business Services	1	-1	2
Orange County Banc	OCBI	Banking	1	-1	2
Consolidated Edison	ED	Utility-Electric	1	-2	3
South Jersey Ind	SJI	Utility-Gas	0	1	-1
Fastenal Company	FAST	Building Materials	-1	-1	0
Cenovus Energy Inc.	CVE	Oil&Gas	-1	-1	0
Erie Indemnity Co	ERIE	Insurance	-1	0	-1
Hawkins Inc.	HWKN	Chemical-Specialty	-2	-1	-1
Kellogg Company	K	Food Processing	-2	-2	0
WGL Holdings Inc.	WGL	Utility-Gas	-3	-2	-1
Boardwalk Pipeline MLP	BWP	MLP-Natural Gas	-3	-2	-1
AT&T Inc.	T	Telecommunications	-3	-2	-1
Southern Company	SO	Utility-Electric	-3	-2	-1

Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.