Barron's Interview Defiance Asset Management
6990 views
Rate Now: 1 2 3 4

average rating: 0.00 / 0 ratings
Created by barrons2
DESCRIPTION:

Date updated:04-26-2008

ROBERT MARCIN HAS NEVER BEEN SHY ABOUT EXPRESSING an opinion. As an equity manager for Miller, Anderson & Sherrerd in the 1990s, Marcin didn't shrink from taking on mediocre CEOs or fickle Wall Street analysts. Marcin started Defiance Asset Management in 2004. The firm, which now runs more than $500 million, has a hedge-fund structure and goes long and short stocks. Marcin specializes in finding high-growth companies whose shares trade at low price/earnings ratios. That combination isn't easy to find. Marcin also is good writer, penning lively investment-oriented columns periodically for the Street.com.

symbol name last price % change open
  • +
  • TEX
    Terex Cp
  • $19.13
  • +0.47%
  • $19.30

Q: If Terex can come close to hitting DeFeo's goal, where could the stock trade? A: Marcin: It traded in the mid 90s last summer and got as low as 50 earlier this year. We think it could hit $100 a share. Why? If Terex can make $7.50 in 2008 and $9 in 2009, it would only take a price/earnings ratio of 12 to get you to 100. Comparable companies like Caterpillar [CAT] and Joy Global [JOYG] already are trading for 14 to 20 times earnings.

People owning TEX also tend to own: ATIHALMFLXTIEAHMAIZALB

TheStreet.com Rating: D What is this?

  • +
  • CMI
    Cummins Inc
  • $43.70
  • +1.51%
  • $43.69

Q: What about the stock, which is now around 55? A: Marcin: The Wall Street consensus is for $4.50 in earnings this year and a little over $5 next year. We think Cummins can do even better because it has the opportunity to increase its operating margins, now at 8% to 9%, by a couple percentage points over the next few years. We think Cummins can make closer to $5 in earnings this year and perhaps as much as $6 in 2009. Many machinery stocks trade for 13 to 15 times earnings. Put a 14 multiple on $6 in earnings and the stock could get close to 85 next year.

People owning CMI also tend to own: ACICBIDRYSFTKJECTBSIAAPL

TheStreet.com Rating: C+ What is this?

  • +
  • COP
    Conocophillips
  • $50.66
  • -1.00%
  • $51.75

Q; How much higher could Conoco go? A: Marcin: If commodity prices hold these levels and Conoco continues to aggressively repurchase shares, it could make $14 next year. If the stock were to trade at nine to 10 times earnings, that could be $120 to $140 a share. If the energy complex rolls over, we have a fair margin of error given the low valuation.

People owning COP also tend to own: AAALLAPCBUDCVXDOWGSK

TheStreet.com Rating: C- What is this?

  • +
  • NBR
    Nabors Inds Inc N
  • $20.23
  • -0.05%
  • $20.68

Q: The stock is around $37. A: Marcin: Nabors is expected to earn $3.15 this year and nearly $4 next year. Those estimates could be conservative for one simple reason: Every energy exploration and production company in the U.S. has a new play, whether it be in Pennsylvania or Wyoming. The combination of drilling technology improvements and high gas prices is going to lead to a significant increase in drilling over the next two to three years. Nabors gave an interesting presentation recently in which it outlined a scenario whereby the company could potentially earn $6 a share in profits in 2010 or 11. If Nabors earns between $5 and $6 in a few years, the stock should get to $60.

People owning NBR also tend to own: ESVHPRDCAMTDBNIGLWUNH

TheStreet.com Rating: C What is this?

  • +
  • WDC
    Western Digital C
  • $39.48
  • +2.17%
  • $39.25

Q: The stock's around 30? A: Marcin: It's expected to make about $4 a share in both the fiscal year that ends in June and the June 2009 year. We think Western Digital can make between $4.50 and $5 in fiscal 2009. Hard-drive stocks never get a high valuation, but if the company gets an 11 P/E on $4.50 a share in earnings, it could approach $50 share. A company that produces revenue growth of 20% a year, generates a lot of free cash and operates in a very appealing part of the technology business ought to be able to get a 10 to 12 P/E ratio.

People owning WDC also tend to own: MIIBHICVXSBLVLOFMDPWEI

TheStreet.com Rating: B What is this?

  • +
  • SKX
    Skechers Usa Inc
  • $24.55
  • +3.11%
  • $23.96

Q: Talk about Skechers. A: Epstein: Skechers. It's one of the biggest footwear companies in the country. It specializes in knockoffs. Let's call them fast trend followers. The nice thing is that if there is a trade-down effect, which Wal-Mart is benefiting from, Skechers ought to participate. Skechers shoes are getting more shelf space at leading retailers because they make good-quality shoes for a value price. Their shoes cost $20 to $50 a pair. Skechers also has a fast-growing international business that accounted for 27% of revenues last quarter and is growing over 40%. The stock is around 21, which is about 10 times estimated 2008 earnings of $2 a share. The company also has $6 a share in net cash. If the stock gets a P/E of 14, it could trade into the high 20s.

People owning SKX also tend to own: ATVICCJCELGCRZODSXDVNEMC

TheStreet.com Rating: C What is this?

  • +
  • PFE
    Pfizer Inc
  • $18.49
  • -0.80%
  • $18.83

Q: Would that rule out a stock like Pfizer, which trades at just eight times earnings? A: Marcin: We don't own Pfizer. It's not growing.

People owning PFE also tend to own: AAALLAPCBUDCOPCVXDOW

TheStreet.com Rating: B What is this?

Portfolio not tracked!

Comments not available

ADD YOUR COMMENTS:

Jim Cramer's Portfolios of the Week

By Roberto Pedone Posted on Dec. 4, 2009 According to Jim Cramer, the bears need a new line of argument. He said the doom-and-gloomers have been very quiet of late, but...

12.04.09 | 09:43 AM
Top-Yielding Monthly Dividend St...

By Fred Fuld Posted on Dec. 3, 2009 Everyone can appreciate the security offered by a regular income, whether in the form of a paycheck or retirement check -- or a divi...

12.03.09 | 16:15 PM
Cramer's Take on Headline Stocks...

Posted on Dec. 3, 2009 Regardless of why a stock is in the news, it never hurts to hear what a professional investor has to say about it. The key is to gather as much in...

12.03.09 | 14:40 PM
'Fast Money' Portfolios of the Week

By Roberto Pedone Posted on Dec. 3, 2009 The traders of CNBC’s “Fast Money” think the path of least resistance for the stock market remains to the upside. On Tues...

12.03.09 | 12:05 PM
more articles
The Presidential/Political Thread
01.02.08 | 08:05 AM From author Dave Cox
General market Technical Analysi...
11.14.07 | 22:55 PM From author ZA
Full Disclosure
11.09.08 | 12:30 PM From author alchemist
Nymph's Trading Daily Trading Diary
04.13.09 | 01:10 AM From author Trading Nymph
more forums
Q. Does anyone know of a good site,...
12.05.09 | 10:35 AM Asked by rleal

A. Penny stocks web sites are full of scam
artists. I would stay away from them and
do your own research. db

today 's lists
Biggest % Gainers

Here are some of the largest % gainers from Dec. 4, 2009. more

Analyst Upgrades

Analyst Upgrades and EPS estimate changes for Dec. 4, 2009. Read more here. more

Cramer's Lightning Round

These are the stocks from Jim Cramer's Dec. 4 Lightning Round. We list the stocks on which he is BULLISH and BEARISH.... more