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Kenneth Fisher Recommends: TAM S.A., Net Servicos de Comunicacao SA, Hasbro Inc.

October 07, 2009 | About:
guruek

guruek

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(GuruFocus, October 7, 2009) These days Investment Guru Kenneth Fisher is pitching his new book " How to Smell a Rat: The Five Signs of Financial Fraud". In the video clip below, he gave away two tips out of five.


1. Good fences make good neighbors: Do not give up the physical custody of the asset so it cannot be taken out from the back door.

2. Be careful with people who only show you good and smooth returns year after year. All great investors, including Warren Buffett have good years and bad years. If someone shows only good and smooth return, maybe he/she is not really investing.


For the rest of the tips, I guess one have to read his new book.



While we understand Ken Fisher for holding back some secrets in the new book, we appreciate the stocks he gave in the interview. Fisher reiterated his claim that the on-going market rally is part of a global-wide V-Shaped recovery. Three stocks were recommended by him:

1. TAM S.A. (TAM)

TAM S.A.provides scheduled air transportation in Latin American, both the domestic market and the international market through its operating subsidiaries TAM Linhas Aereas and TAM Mercosur. The Company also directly serves ten international destinations and provides connections to other destinations through commercial agreements with American Airlines Air France and certain other airlines. Tam S.A. has a market cap of $1.38 billion; its shares were traded at around $13.77 and P/S ratio of 0.2.

Fisher bought 10,500 shares in the quarter that ended on 06/30/2009, which is less than 0.01% of the $24.67 billion portfolio of Fisher Asset Management, LLC.

Fisher likes airline stock because it serves a growing market. About 2/3 of the revenue comes from Brazil, Fisher’s favorite emerging market. Fisher thinks the company can grow 15% a year for the foreseeable future and it is selling about about 8 times earning. In his best scenario, if one buys a stock at half of grow multiple and sells at twice the grow multiple, and in the meantime the company grows twice, one makes 8 times the money.

2. Net Servicos de Comunicacao SA (NETC)

Net Servicos de Comunicacao SA is the largest Pay-TV multi-service operator in Latin America. Net Servicos De Comunicacao S.a. - American Deposi has a market cap of $4.92 billion; its shares were traded at around $12.43 with a P/E ratio of 54 and P/S ratio of 2.4.

As of 2Q09, Fisher did not have ownership in the stock, but that does not stop him from buying some since then. He likes the stock again because it services the growing middle class in Brazil. It is not just cable television, it offers internet and landline services as well, so one get to buy into a telecommunication player in a fast growing market.

3. Hasbro Inc. (HAS)

Hasbro Inc. is a worldwide leader of toy maker. Hasbro owns brand such as PLAYSKOOL, KENNER, TONKA, Hasbro Inc. has a market cap of $3.87 billion; its shares were traded at around $27.65 with a P/E ratio of 14.4 and P/S ratio of 0.9. The dividend yield of Hasbro Inc. stocks is 2.9%. Hasbro Inc. had an annual average earning growth of 4.4% over the past 10 years

Again, GuruFocus does not found any ownership in the company by Fisher as of 2Q09, but that might be temporary. Grandfather Fisher thinks the company is in a good position as last year the Grandparents held back in midst of the financial uncertainty, this year is different: economy stabilized and stock market is back, Grandparents are going to spoil their Grandchildren again.

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Rating: 2.4/5 (7 votes)

Comments

Gangstarr
Gangstarr - 4 years ago
Isn't this guy always a Bull?
cm1750
Cm1750 premium member - 4 years ago
He does not seem to be an especially good stock picker either vs.a benchmark. PURIX is his mutual fund and has shown mediocre results.

He is basically a marketer who suckers people into paying high fees for low value-added management.
RuggerMike
RuggerMike - 4 years ago


Fisher is bullish a lot, but isn't always. For example he was bearish in 2001 and 2002 for a long while. I think you can still see his old Forbes columns where he is bearish online at Forbes for free. I looked into PURIX myself. Looks like it has the S&P beat by a lot and is killing it this year. Also the stocks he picks in his Forbes columns do well as a group if you follow them. I don't have the exact number but Steve Forbes wrote about Ken Fisher not long ago and said over the last 11 years his stocks have the S&P beat by 5% on average, which is more than ok stock picking. I know the point of commenting on blogs is to be funny and pick on people, so I'll stop with the amplifications now.
Dr. Paul Price
Dr. Paul Price premium member - 4 years ago
































Purisima Total Return: Returns














Calendar-Year Total Returns






































































































































1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 YTD 9/2009
Total Return % 24.4 -7.4 4.1 -22.0 35.3 7.8 8.7 15.1 12.4 -43.0 29.5
% Rank in Cat 69 38 1 71 43 92 68 87 40 56 39
+/- Category -16.8 1.7 21.6 -2.6 0.8 -7.4 -2.9 -4.7 1.2 -1.0 0.6
+/- Index* -2.6 6.8 25.5 -6.0 -3.3 -12.4 -4.8 -11.3 1.3 0.4 0.5


















Trailing Total Returns






































Fund







Category: World Stock






































































































































Total Return % +/- Index* +/- Cat % Rank in Cat
1-Day 0.41 --- --- ---
1-Week 0.47 --- --- ---
4-Week 5.53 --- --- ---
3-Month 26.44 6.97 9.29 21
Year-to-date 30.08 0.50 1.20 39
1-Year 17.79 14.56 17.15 52
3-Year Annualized -3.95 -0.35 -0.72 54
5-Year Annualized 2.48 -3.59 -1.89 67
10-Year Annualized 2.86 0.32 -0.22 46


















Growth of $10,000.00






























Fund







Category: World Stock







Index: MSCI EAFE NR USD


View more charts














Average Load Adjusted Return












































Period PURIX
1 Year NA
3 Year NA
5 Year NA
10 Year NA














Best/Worst Calendar Year Returns




























One Year Return Three Year Return
Best 35.28 (2003) 25.45 (1997-1999)
Worst -42.95 (2008) -9.63 (2006-2008)












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