Stock Of The Month: NLY

For what it's worth, I still think Annaly is the best real estate stock out there (for those of you that really want to be in real estate). - January 1, 2009

I'm going to try something new for the Stock Of The Month: instead of a lot of blahblahblah (which usually reads remarkably similar from month to month), I'm just going to list the good and bad from Yahoo's Key Statistics page.

Annaly Capital Management (NLY)

Positives:

Huge profit and operating margins (83% and 86% respectively).

+7% spread between ROE and ROA.

Positive operating cash flow ($9B).

Trailing P/E of 13, forward P/E of 6.

Whopping 17.3% dividend yield.

Negatives:

Huge debt ($57B)...of course, debt is their business.

Low insider holding (0.55%).

Here's my current portfolio. As always, I believe in all of these stocks - until I sell them.

Apple (AAPL) 10.70%

Southern Copper (PCU) 9.84%

Google (GOOG) 9.39%

Terra Nitrogen (TNH) 6.92%

Dominion Resources Black Warrior Trust (DOM) 6.68%

Frontline (FRO) 5.40%

Ace Limited (ACE) 5.36%

Tesoro (TSO) 5.35%

American Software 3.94%

Blackstone (BX) 3.53%

The Distressed (AIG, C, F, FNM, JSDA, MOT, MTLQQ.PK, WFC, YRCW) 3.42%

Biovail (BVF) 3.38%

Tidewater (TDW) 3.32%

Great Northern Iron (GNI) 3.22%

Vodafone (VOD) 3.21%

McDonald's (MCD) 3.00%

Apache (APA) 3.00%

DuPont (DD) 2.56%

Annaly Capital Management (NLY) 2.55%

PDL BioPharma (PDLI) 2.32%

Cherokee (CHKE) 2.23%

2009 Stock Recap

2009 was a pretty good year for the portfolio - a 39.0% return vs. 23.5% for the S&P 500, and only 1 stock sold after a ridiculous 19 the previous year:

Atlas Resources (ATN)/Atlas Energy (ATLS)
Year-opening price: $14.85
Sold: Apr @ $28.47 (92%)
Year-closing price: $30.14 (103%)

With that out of the way, here are the ongoing concerns, ranked from worst to best:

Motors Liquidation (MTLQQ.PK)
Bought: Feb @ $3.00 (as GM)
Year-closing price: $0.47 (-84%)
Slowly but surely meandering its way to zero.

YRC Worldwide (YRCW)
Bought: Feb @ $2.90
Year-closing price: $0.84 (-71%)
Shaping up as a lottery ticket due to likely bankruptcy.

Frontline (FRO)
Year-opening price: $29.61
Sold: Nov @ $23.99 (-19%)
Re-bought: Dec @ $29.30
Year-closing price: $27.32 (-7%)
Did a terrible job of trading, but I still like the business.

Dominion Resources Black Warrior Trust (DOM)
Year-opening price: $16.60
Year-closing price: $14.29 (-14%)
Saved by the dividend.

Jones Soda (JSDA)
Bought: Feb @ $0.46
Year-closing price: $0.43 (-7%)
Sugar-high, then sugar-crash for this stock.

Ace Limited (ACE)
Year-opening price: $52.92
Year-closing price: $50.40 (-5%)
A still-very-sleepy financial company.

Citigroup (C)
Bought: Feb @ $3.41
Year-closing price: $3.31 (-3%)
America's worst bank, desperately needs to be broken up and sold off.

Cherokee (CHKE)
Bought: May @ $18.30
Year-closing price: $17.82 (-3%)
11% dividend yield.

Great Northern Iron (GNI)
Bought: Oct @ $94.73
Year-closing price: $94.00 (-1%)
Most recent commodity play, bought near the top.

PDL BioPharma (PDLI)
Bought: Jun @ $6.94
Year-closing price: $6.86 (-1%)
14.5% dividend yield.

McDonald's (MCD)
Bought: Nov @ $62.49
Year-closing price: $62.44 (0%)
Hoping for international growth, and domestic stability.

Tesoro (TSO)
Year-opening price: $13.17
Year-closing price: $13.55 (3%)
An up-and-down stock - not for the faint of heart.

DuPont (DD)
Bought: Sep @ $32.36
Year-closing price: $33.67 (4%)
Big and boring, just like I hoped.

Vodafone (VOD)
Bought: Oct @ $21.47
Year-closing price: $23.09 (8%)
Should be sure and steady growth for years.

Terra Nitrogen (TNH)
Year-opening price: $94.25
Year-closing price: $104.08 (10%)
The 6% dividend helps here.

American International Group (AIG)
Bought: Feb @ $25.40 (split-adjusted)
Year-closing price: $29.98 (18%)
I have no idea where this stock is going.

Tidewater (TDW)
Year-opening price: $40.27
Year-closing price: $47.95 (19%)
A quietly solid year for this offshore oil services company.

Biovail (BVF)
Bought: Apr @ $10.92
Year-closing price: $13.96 (28%)
Bought strictly for the dividend (which was slashed), but capital gains have made up for it.

Apache (APA)
Year-opening price: $74.53
Year-closing price: $103.17 (38%)
Nice bounceback for this oil and gas company.

Blackstone (BX)
Bought: Feb @ $4.43, Jul @ $10.17
Year-closing price: $13.12 (38%)

My favorite weasels of Wall Street.

Wells Fargo (WFC)
Bought: Feb @ $18.40
Year-closing price: $26.99 (47%)
America's finest bank (not that that really means anything).

American Software (AMSWA)
Bought: Mar @ $3.52
Year-closing price: $6.00 (70%)
Nice little tech stock.

Motorola (MOT)
Bought: Feb @ $4.43
Year-closing price: $7.76 (75%)
The phone slump could be over with the Droid.

Fannie Mae (FNM)
Bought: Feb @ $0.60
Year-closing price: $1.18 (97%)
Some people believe this stock is worthless, and I'm not certain they're wrong.

Google (GOOG)
Year-opening price: $307.65
Year-closing price: $619.98 (102%)
2009 was the year Android finally broke through.

Southern Copper (PCU)
Year-opening price: $16.06
Year-closing price: $32.91 (105%)
Copper a big participant in the commodity bull run, version 2.0.

Apple (AAPL)
Year-opening price: $85.35
Year-closing price: $210.73 (147%)
Can the iPhone and App Store be stopped?

Ford (F)
Bought: Feb @ $1.86
Year-closing price: $10.00 (438%)
Dare I say it, the great American car company.