Ok, this morning I wrote about the first five stocks in the Fruit Basket portfolio. Here are the remaining five. In the next few weeks, we’ll start showing readers how each of the stocks have performed since our launch April 10.
Maui Land & Pineapple Co. (MLP)
If you go to the north end of Maui for a vacation, chances are good you’ll stay at the Kapalua Resort, the company’s pride and joy. Maui L&P does three things: produces and sells pineapples, operates the Kapalua Resort and Condominiums and develops land in and around the resort. They’re huge landowners. Most of their profit comes from developing the land into tasteful housing that properly reflects the areas natural beauty. The largest shareholder is Steve Case, former CEO of America Online and current Chairman of Exclusive Resorts, the world’s largest resort real estate vacation membership group. We feel there is plenty of developable land left – they own 25,000 acres - to continue growing the business.
Orange 21 Inc. (ORNG)
The company markets premium sunglasses in the action sports market under the brand Spy Optic. Sales continue to grow for this small, San Diego-based manufacturer. Unfortunately, it’s seen better days in terms of profitability. Its year-end results were a mixed bag with sales up 10 percent to $42 million and a net operating loss of $9 million. On the surface, it appears there’s not much to like about the company. However, look deeper and you’ll see that with greater focus and operational execution, the company can right the ship rather quickly. They bought out their primary manufacturer in 2006, which will allow greater control over production and delivery to market. Further, they eliminated the apparel line along with non-producing sunglass lines to focus on their best products retailing between $80 and $150. A wildcard – No Fear, the action sport clothier, owns 14 percent of the company.
Research In Motion Ltd. (RIMM)
This one was a stretch but it definitely helps on the diversification front. Those of you with Blackberries might already be familiar with the company. For people like me who rarely use cell phones, RIMM is one of the largest makers of wireless solutions in the world. Their Blackberry device, a combination of personal digital assistant (PDA) and cell phone, allows customers to receive email, phone calls as well as the usual contact stuff that PDA’s do. Their use is so prevalent that a term was coined – crackberry – for anyone addicted to them. There currently isn’t a cure with the exception of turning it off. The company itself makes a bundle off them. In 2007 the after tax income was $634 million or $3.33 per share. Need I say more?
The J.M. Smucker Company (SJM)
When I think of jam, the name Smuckers comes to mind. A Smucker has run the company since its beginning in 1897 in Ohio. Once just a jam maker, they’ve also diversified, now marketing such brands as Crisco, Hungry Jack, Jif, and Crosse and Blackwell. Their most recent acquisition, announced on Tuesday puts them in the condensed milk market, buying Eagle Family Foods Holdings, also of Ohio. The company isn’t growing at a rapid pace, about four percent in 2006, but they have an internal goal of 8 percent in 2007 and beyond. The Smucker’s plan is to produce half the projected growth organically and the rest from future acquisitions. If you are looking for income, the company pays a $1.20 dividend, yielding about two percent. This stock is definitely not a high flier.
U.S. Lime & Mineral (USLM)
This company is a bore but they sure can make money. The company operates in two areas: the first and biggest part of the business mines, manufactures, and sells lime and limestone products to the construction industry. The second is a 36 percent interest of the oil and gas revenues generated by the company’s 3600 acres it owns in Texas. I’m bored just writing this but dull is good when it comes to investing. Last week, the company issued first quarter results, and although sales were marginally up and income down, they still made $2 million in net income on sales of $29.5 million. Apparently, they had a problem with a kiln they opened at their lime operation, increasing expenses considerably. I’d look past this cost over run. They’ve increased revenues and profits each year for the past four, and it’s likely they’ll do it again in 2007.
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