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Quarterly Assesment of Stock of Week Picks

First quarter of 2009 is almost over. I thought 2008 was interesting but looking at what we saw in Q1 with S&P reaching 666 and then bouncing more than 20% in 3 weeks, 2008 was relatively calm:-). I thought it would be good time to take assessment of my "stock of the week" recommendations. Here is summary:
  • Dow (-11.40%); S&P (-9.67%)
  • My recommendations in plus:

BCS (95%), BCS-D (44%), GE (33%); HUN (3%); IDG (91%); XL (51%)

  • Recommendations in minus:

DRYS (-35%); HIG (-22%); OIL (-5%)

  • In all, if one had bought 100 shares of all weekly picks, overall portfolio would be up by about 15%. Not bad comparing DOW and S&P returns till now. Let's see how these picks do over the year

Now let's come to this week's recommendation:

Symbol: PLD

Company: Prologis

Buy price: $5.5 to $ 6

Target price in 12 months: $ 9 (for 50% return not including dividends)

Context:

ProLogis is a leading global provider of distribution facilities, with operations in markets all across North America, Europe and Asia. The company has over $32 billion of assets owned, managed and under construction, comprising more than 475 million square feet (44 million square meters) in 2,500+ facilities worldwide. It is a fortune 500 company with annual revenues of approx $6B. Even after reducing projected dividend to $1 (from over $2), it would yield well over 14% at today's prices. The stock got punished due to upcoming debt load in 2010. However management is confident that it will be able to refinance this debt well ahead of time. Once those clouds are cleared, the stock would trade in teens. Company's business is directly co-related to economy and hence has major impact due to recession. As recession ends towards end of year, company would be a great position to resume its growth.

(disclosure: I have taken small position at recommended prices)

Have a good weekend !

/Shyam


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