It might be hard to swallow, DOW “in the business of change” from their 2007 annual report because they have been around for 110 years.  However think about changing markets and the challenges faced in 110 years and the pieces begin to fit.  Evidence on paper that DOW is up to the change challenge is 34% of their $53 Billion in sales come from products produced in the past 5 years.  They have divided services into what they call “Performance”(accelerating innovation) and “Basics”(integrating raw materials).  Each sector currently makes up 50% of their business, I believe what is important is the DOW leadership over “Performance” will have to meet challenges in sales with the model of selling products, while the leadership over “Baciscs” will have to meet challenges through joint ventures creating solutions to major national issues.  For example DOW has a new foam product which uses 60% less energy to produce and is green house gas nutral for the furniture, carpet and bedding industry.  This product will sell company to company under the “Performance” leadership.  However in China DOW is involved in a joint venture for the chemical side of an energy efficient coal to chemicals plant, which is a large joint venture being operated under the “Basics” leadership.  This gives experience to thousands of their employees to expand in two different and healthy methods of operation.  Regardless of the leadership, DOW has a baseline 2004 energy used per pound of product and a goal for this figure to be reduced 25% by 2015.  They were 4% better in 2007.

I believe Ben Hur should purchase DOW because they have the team in place to handle the major issues of the world today.  The company culture understands challenges are to come and they will be a part of national solutions resulting in earnings for the long term.

Cypress Semiconductors (CY)

I did not get a chance to present my stock at the last meeting, but I wanted to provide a brief explanation for my attraction to this company.

With oil prices above $120/bbl and gas prices at $4/gal coupled with a presidential election where candidates will be touting greener energies and a movement away from oil dependency, alternative energies seem like a great place to be invested.  The problem is that the industry is flooded with wannabes and only a few of the companies will actually survive.  I believe Cypress Semiconductors, yes a semiconductor company, is a safe way to play the alternative energy sector.

Cypress Semiconductors specializes in Programmable System-on-Chips (PSoC).  These little suckers are what make your mouse’s “click wheel” work so smoothly.  After several years of averaging right at $800M in revenues, they broke out in 2006 with over $1B and in 2007 then increased that 50% to $1.5B including nearly $400B in net income.

More importantly though, Cypress Semiconductors spun off SunPower Corp. (SPWR), a solar subsidiary, two years ago but they retained over 50% ownership.  SunPower makes photovoltaic cells and it’s stock has soared over the last year or so, although it’s currently down about 40% YTD do to it’s meteoric rise last year.  SunPower Corp. brought in $775M in revenue last year, up from $78M two years ago and has become profitable the last two years.  They recently gave sales guidance for 2008 of $1.3B, so they are definitely a growth stock in the solar industry.  As of the close of day on June 4, 2008 (as I write) SPWR is priced at $78.52 a share which gives it a $6.65B market cap.

Now remember that Cypress owns over 50% of SunPower which means that if Cypress’s semiconductor business unit was worth $0.00, it would still have a market cap of $3.325M based on it’s ownership of SunPower shares.  Cypress currently has a $4.18B market cap, which means that it’s semiconductor business is being valued at $800M.  Hard to imagine that a company bringing in over $1B in sales per year is only worth $800M!!  I think this is a good stock to own as it allows you to have exposure to two sectors and you have a very solid floor to limit your downside risk.

Joey

Just a taste:

GKK - Google Finance

Chasing Value

25 Stocks Benjamin Graham would Like

Gramercy Capital Corp. is a REIT that has holdings in commercial properties. Over 50% of those are held by the like of BOA and Wachovia. Both are strong banks that are not going anywhere anytime soon.

GKK has a 14.68% Dividend Yeild.

That means if we buy $1000 in it they will pay us close to $150/year in dividends which is pretty much guaranteed and likely to increase not decrease.

On top of that we have any gains that it may achieve on the appreciation of its stock price. A year ago this stock was at $32 so it has room to grow

Over the last year GKK is down 45%, which makes it very cheap today.

It has a High sales growth rate and margin, which means its good at making money.

-Cambo

INET - Internet Brands “}

Notes below:

Internet Brands, Inc. is an Internet media company that builds, acquires, and enhances branded Websites. Its Websites are focused on facilitating the research of high-value or specialty products, enabling it to sells targeted advertising. Now own over 69 web sites that bring in over 100,000 visitors/month and attract more than 32 million visitors per month across their properties

Strong Acquisition Pipeline
- spending about 25 million per quarter
- Acquire Websites at Great Rates
- On a tear. Buying properties constantly.
- In fact, with the soft environment, sellers may be more motivated to do deals

Loss of some revenues
- mortgage and auto vertical related
- Replaced with other revenues

Concerned about costs rising with revenues
- Cost attributed to Acquisitions
- But that doesn’t seem to be the case
- Cost is mainly due to personnel both selling and technical
- hopefully Cost Efficiencies

Conclusion
- hold for now. Watch for cost efficiencies

Links - Documents read in preparation for this video:

Internet Brands - 2007 10K
Internet Brands - 2008 10Q - Q1

Presentation Video

Benhur Investments Hot Stock: Orbital Sciences (NYSE:ORB) June 2008 from Loren Norman on Vimeo.

Who Is Orbital Sciences?

Orbital Sciences (NYSE: ORB) is a space contractor founded in 1982 with a focus on building smaller and more affordable satellites and launch vehicles, with projects in communications, defense systems, scientific research. All of these market segments are trending upwards.

This is a growth stock. Orbital is aiming for 10% growth rate for the next 3-5 years. The company is maintaining its focus on the smaller, growing niches which are underserved by the major aerospace companies. Orbital seeks to continue providing highly-reliable space systems on fast schedules at affordable prices.

Orbital is an R&D stock, at its core. A strong R&D stock with some age will show a gradient of segments, ranging from mature segments which make steady money at a nice margin to fledgling segments which are just emerging with low profit margins but excellent long-term growth. Orbital looks to have legs on this point. Let’s examine their segments:

3 Core Segments

Launch Vehicles

These are literally the rockets that get various systems into space, whether it’s a satellite or a missile. This is the original business Orbital was set up for in the early 1980s, and over 500 launch vehicles have been produced to date. About 177 more of them are under contract, currently. Launch systems represent the mature segment of Orbital’s resources, where they hold a majority share of the market with profit margins at 10%+ and an expected growth of about 10% per year through 2010.

Satellites

Orbital has a strong share of the satellite market, with 145 satellites delivered since ‘82, and 28 more currently contracted. Despite Orbital’s strong position here, the satellite market is not as lucrative, with revenue growth projected at 5-7% and profit margins in the 8-9% range. However, Orbital is the dominant player in the small communications satellite market, with 55% of the segment.

Advanced Space Programs

This is the bleeding edge of R&D for Orbital. In the past 10 years, they have worked on “8 Major Advanced Space Products” which are adjacent to the core offerings. Just last year this segment was spun out into its own group, and with good reason. Its margins are currently only around 6%, but the growth potential looks to be something like 20-25% per year through 2010, and I see no reason why it would stop there.

Some Financial Info

Orbital maintains a high revenue visibility due to a $3.4B contract backlog, which is already 60% of revenue coverage between 2008 and 2010!

Orbital was recently awarded a DoD contract for $100M over the next 10 years, and they also announced earlier this month that they would be manufacturing the Koreasat 6 Communications Satellite for KT Corporation in the Republic of Korea.

Most of the information in this post is derived from the ORB presentation at FBR given on May 28th.

Josh presents Rick’s Cabaret International, Inc. (NASDAQ:RICK) for purchase as the Hot Stock for June 2008. Rick’s operates upscale gentlemens clubs throughout major cities in the US. Their current aggressive acquisition methods and organic growth places them at the forefront of their industry. They are poised to see their business, and stock price, grow.