Follow the Insiders (WHI)

W Holding Company, Inc. is a financial holding company offering a range of financial services in Puerto Rico. It is not an exciting business in any aspect. In the mist of large bank mergers and acquisitions, this little thing exists at all is a mere miracle.

Maybe they have done something right?

It is conservatively managed, good reputation locally, increasing market share and trading below book value. The insiders, multiple insiders, have shown their confidence in the stock and brought above current market price.

This is the company Peter Lynch would buy if the Fidelity Magellan found is not too big. This is also the company FatCat has just added to her portfolio.

TGX Still Great and Low Price

So how much has TGX appreciated since FatCat bought it?

In this short time period, if you have invested $10,000 in TGX, you would have more than $15,655. If you invested the same amount in S&P 500 index fund or equivalent, you would have $10,154. So was FatCat just lucky? Yes. FatCat admits the 56.55% gain in two weeks has some luck but the significant appreciation over S&P 500 is expected. FatCat further predicts that TGX will continue to out perform S&P 500 in the upcoming quarters. Take a closer look at the money:

In last 5 quarters the revenue grows at a steady pace and the earning doubles every quarter. Therefore, it is natural to expect the next quarter’s EPS will be around 0.2 with flowing quarters to be 0.4, 0.8 and 1.0 result of annual EPS of 2.4 which is 10 times of the year just ended. Therefore, FatCat predicts the price of $60/share using health sector P/E of 25.

Bottom line: FatCat anticipates TGX share price to double every quarter and reach $60 at year end.

A Gold Mine (NXG)

Northgate Minerals Corporation (Northgate) is a gold and copper concentrate producer in Canada. Northgate owns and acquires properties, explores for precious and base metals. FatCat is happy to find that it is currently trading at a good discount.

There is intrinsic risk of buying a foreign company, even when it is trading on an American stock exchange. There are more unknown because of the distance and difference in regulation. There is also the fluctuation of exchange rate. Should US dollar appreciates, the stock just drop value without anything actually change in the company itself.

FatCat takes very cause kitten step towards this mining company. The book speaks loader than any pundit.

1. The value: NXG is trading at P/E of 6.59, comparing to industry P/E of 24.18, sector P/E of 20.16 and P/E of S&P 20.69
2. The cash: FatCat pays more attention to cash than any other ratio. NXG's Price to Free Cash Flow is merger 7.47 compare to industry of 55.88 sector 37.05 and S&P31.85
3. Last but not least, efficiency Net Income/Employee (TTM) 346,692 compare to industry106,518 sector 64,138 S&P114,032

Bottom line: FatCat added NXG to her portfolio.