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Brought up -- equities makes it a real stock pickers market that's a good thing about thing it means you actually have to work to find the real deals but that's what my next guest does and he sharing.
He is eminently qualified brain with you to make some judgments he's been on the Barron's roundtable every single year.
Check out all three of his picks from the last appearance it was really just a couple months ago April 12.
They are all up some two of them are up about 8% want a thumbs up more than 2%.
Today he has two new stock recommendations.
If you missed out last -- Scott Black is back to give us new ideas he's with Delphi management the founder and president about a billion in assets under management.
Live from Boston good to see you thank you for coming on Scott.
-- thank you for inviting me Liz is very nice to be -- again while I look at your picks previously and the one that.
Tends to jump out at me because you really have loved this is bonanza creek it continues to jump higher and higher every time you come here.
This is an energy pick but.
Tell you what was it when you first decided to die -- -- by bonanza creek.
That told you this is an opportunity and and how that sort of -- to other names that you like to pick.
Well at the time production from the drill bit was growing at about a 150%.
Clip and a on a price to cash flow.
It was really selling on a forward basis and about 66 and a half times which really wasn't expensive giving that kind of internal growth.
Request -- -- -- just come public so is really on the inefficient side of the equation this is very few people knew what I was.
I know the stock -- is -- about 39 but ironically given.
The cash flow projection for next year it's really not expensive if somebody want to take a longer view and just not trade it.
Is a good entry point because they're gonna continue to brother production -- well above 50% a year.
Well now we want to see some new names your other names have also done relatively well in fact you had.
Synergy AM three sources that was up about 3% -- Amdocs was a winner that's a Texas Tech name but you've got a brand new technology -- let's get to it and tell us.
Okay everybody listen carefully because -- one of those geniuses who understands this stuff explain to us what you love about -- Well lamb has actually moved up here it's about fifty dollars a share.
I was out in California are -- and it about a month ago we met with management to present a senior vice president -- finance -- the company has excess cash.
Forget about one point two billion in excess cash which -- -- over seven dollars a share.
We've are issued a turn in the earnings -- point of inflection the earnings are turning -- wears a lot of the semiconductor capital equipment and not.
They have been dominant share in two areas now looks -- and one -- call -- back in action.
He should -- from point to wait a 28 nanometers to twenty nanometer line which you have to have great precision.
In terms of making -- smaller.
Small line -- -- -- really dominate there -- three players this Tokyo electron applied materials and lamb lamb has about a 45 share.
They really are in the commanding area of that it -- sort of wait for -- Right and that -- -- I just want to mention that that a lot of what they do it ends up.
In some way or another into Smartphone so that's the real opportunity there.
Yes as you know anything they have to ship you have to catch the chip to make it -- the other thing is they bought novellus about a year and a half ago.
Novellus was it.
Leader in what's called chemical or physical vapor deposition.
It's a fancy name for putting the metal oxide layer on the substrate inside of a vacuum -- but.
It's a necessity otherwise you don't really have.
You don't have the chip in total.
Now there -- a hundred million dollars worth of savings and synergies just coming from the novellus acquisition.
And on its own.
-- that I do probably 375.
Next year it's in -- fiscal safety take stock -- out the cash it's an eleven.
-- -- yeah okay so that's the thing a lot of these names have gotten more expensive but eleven in the grand scheme of things is certainly below what the entire S&P SS and it is at this moment for PE and that would be what around eleven or something I've got seventeen Wright seventeen.
As -- PP I had about sixty a sixteen times forward earnings we using a 104 dollars tuck your right -- -- closer you're a little bit below that we are next pick is an engineering firm.
That does a lot of its business ex US.
Right it's flaw if you're familiar with Bechtel Jacobs or Chicago bridge and I and this is a major -- pat that up.
Com the bill rap on the company's of the backlog has come down because they work leverage to some degree on minding your reminding us bomber off a cliff.
But they have over a year's revenue and backlog may have roughly 3637.
Billion dollars in backlog.
They just had new awards above a six billion dollars for the first quarter of that they promised me that -- at approximately general public 25 billion in new waters.
The margins are going up very nicely.
-- jumped about 43 basis points in the first quarter and that's a lot when you have a 28 billion dollar revenue follow they will -- approximately.
Four dollars and fifteen cents the stock -- 61.
Is we point out they have atomic cash.
-- again this is -- like eleven point one times earnings to return on equity is solid.
The net cash it's bullet proof there's two billion dollars in net cash on the balance sheet now it's not a favor because the backlog was -- this is an opportunity to buy it before the stock.
Before the earnings turn again.
I mean for those of us who -- either busy or lazy.
I'm not saying I'm I'm lazy but let's go after the work for you -- he has come on with winning picks over and over again Scott.
Thank you very much for joining us.
Thank you very much for having me and a nice weekend whereas gala at the Scott Black by the way and Scott served in the army so he knows about my efforts and Jerrells efforts for building homes for heroes and he's a supporter thank you so much we appreciate it.
Scott Black of Delphi closing bell ringing.
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