New Positions Taken 3/1/2011

Tuesday morning we did some shopping and bought some Lam Research (LRCX) and Bunge Limited (BG).  We needed more market exposure after the major head fake from the week before.  It appeared we were headed to break the solid uptrend we had been in, but nope the bulls took control again.  We bounced solidly off the lower trend line and away we went again in our “wonderland” of a market.  By no means did we scalp these two names near the end of the day, but we didn't get them at their high for the day either.  In the future we will try and do a better job of posting very near when we buy/sell.  We are still trying to decide if we want to switch to a new simulator.

Lam Research (LRCX) Manufactures Etch/Cleaning systems used in wafer fabrication equipment for the semiconductor industry.  They have solid fundamentals and the chart appeared ready for a breakout.   ROE of 36%, Strong Financial Health, No Debt, Current Ratio of 3, PEG ratio of 1, analysts increasing expected EPS estimates, and most importantly an 8.83% Free Cash Flow Yield.  The chart looked bullish and we bought near the lower trend line.  I love technical analysis, but also love to keep it simple.

Bunge Limited (BG) Processes grains and oilseeds and produces fertilizers, edible oil and milling products sold worldwide.  They also have a heavy presence in South America, mainly Brazil.  ROE of 23%, Debt/Equity of 0.2, low financial leverage, and a current ratio of 1.3, Expected Sales Growth of 14.3%, PEG of 1.2, solid triple digit year over year growth for EPS previous and estimates going forward, and overall decent fundamentals.  Most important is the story here and there link to food.  It is tough to get access to agriculture/farmland in the public markets, and this is one of my favorite names.   Once again Technicals appeared bullish and will be really bullish if it can break into new high territory set right before the pullback last week.  (email me if you want a list of ways to get exposure to farmland/ag, some are low volume names I don't want to post)