DJIA: 13264.82
S&P 500: 1468.36
Russell 2000: 766.03
"The Markets Can Stay Irrational
Longer Than You Can Stay Solvent"
John Maynard Keynes
January 1, 2008
 We're growing. BURKENROAD REPORTS now has 200 students producing investment research reports on 40 small cap stocks in six southern states. More than 400 graduates of this Tulane University program have moved on to careers in the investment field. Recently, the Financial Times of London named the School's finance department as one of the ten best in the world.
Our pursuit of these stocks under rocks paid off again in 2007. The S&P 500 returned 5.49% and large cap stocks were generally the vehicle of choice last year. An un-weighted index of the companies we followed returned 4.75%. We topped the benchmark Russell 2000 Index (-1.51%) for the ninth straight year.
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Please join us for our 12th Annual Burkenroad Reports Investment Conference on Friday, April 25, 2008 at the Sheraton Hotel in New Orleans. This popular event is free, open to the public and provides individual and institutional investors an opportunity to meet management and learn more about these exciting companies. To register or sign-up for the mailing list, please click here.
Full Gainers
Shares of egg processor Cal-Maine kept investors on the sunny side of the street. The other big winners were all companies providing services to the energy industry.
| Company |
Industry |
Return |
| Cal-Maine Foods |
Egg Processing |
+209.79% |
| Team, Inc. |
Industrial Services |
+110.05% |
| Willbros Group |
Oil Services |
+102.59% |
| Shaw Group |
Engineering Services |
+ 80.42% |
| NATCO Group |
Oil Equipment |
+ 69.83% |
Capital Punishment
Energy Partners stumbled as the result of a failed buyout bid for the Company. The remaining big decliners were in some way tied to the housing slowdown and subsequent decline in consumer confidence.
| Company |
Industry |
Return |
| Stein Mart |
Fashion Retailing |
-62.37% |
| Tuesday Morning |
Specialty Retailing |
-62.25% |
| Energy Partners Ltd. |
Oil & Gas |
-51.64% |
| Craftmade International |
Lamps & Fans |
-51.39% |
| Pool Corporation |
Pool Supplies |
-48.19% |
Fund-A-Mental Research
In 2007 the Burkenroad Mutual Fund*, managed by Hancock Bank, returned 2.96%. The Bank's investment managers utilize our student produced research (as well as other sources) and the majority of the funds holdings are stocks followed by the BURKENROAD REPORTS program. Since inception (12/31/01) the fund has outperformed 96% of domestic equity mutual funds and has outpaced both the Russell 2000 and S&P 500 indexes.
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*HYBUX is the ticker symbol for the no-load fund and HHBUX is the ticker symbol for the load fund.
Gone Pecans
Three of our companies were bought out in 2007. Florida East Coast Industries (FLA) and Reddy Ice (FRZ) were taken over by private equity firms while the weak U.S. dollar attracted an Italian steel maker to Hydril (HYDL). Twenty one of our companies under coverage have been taken over since we started the program in 1993, usually at attractive premiums to investors.
Insider Prophets
Historically, insiders have been pretty good investors. As the year wound down we couldn't help but notice insider buying in the shares of: AFC Enterprises (AFCE), McMoRan Exploration (MMR), Parkway Properties (PKY), RPC Inc. (RES) and Sally Beauty Holdings (SBH).
Kicking the Tires
Each year we attempt to find a few new interesting companies to include in our coverage universe. This year we have added:
| Company |
Industry |
| AFC Enterprises (AFCE) |
Food Retailing |
| Amerisafe, Inc. (AMSF) |
Insurance |
| Crown Crafts (CRWS) |
Infant Clothing |
| Sally Beauty Holdings (SBH) |
Retailing |
| Stone Energy (SGY) |
Oil & Gas |
Terra Firma
Again this year we thank everyone for the tremendous outpouring of kindness and resources as New Orleans continues to rebound from Hurricane Katrina. I truly believe that the changes being made to our educational system, infrastructure and political landscape will pay long-term dividends. Full-length reports on each of these companies and conference registration are available here.
Peter Ricchiuti
Founder & Director of Research
BURKENROAD REPORTS
"Students get the kind of experience that Wall Street firms are looking for. You can't buy this kind of insight!"
The Wall Street Journal Transcripts, January 1997
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