Familiar and Unfamiliar Territories

 | Jun 01, 2012 | 4:00 PM EDT
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It's hard to believe that the S&P 500 is near the same level it was one year ago.

Think of what has transpired over that year:

  • the 17% pullback we experienced during 11 trading days last July and August;
  • the 29% run-up between October and April; and
  • the 8% drubbing over the past two months.

The broad markets may be right back where they were at this time last year, but many individual names have not fared as well.

One year ago, General Motors (GM) was a $30 stock; it's down 27% in the past year, and I still don't buy into the story. It might look cheap, at less than 7x times earnings and with $33 billion in cash, but I believe there's still a pall over the company. It may take time to shed the "government motors" moniker and the stigma attached to the name. Some pretty smart people in the business are on board, but so far, it has been a disaster.

While many restaurant names have had solid runs over the past year -- Papa John's (PZZA), Yum! Brands (YUM), Brinker International (EAT), Bob Evans (BOBE), Buffalo Wild Wings (BWLD), to name a handful -- some have not been so fortunate. In what has been a solid year overall in terms of restaurant stock performance, Ruby Tuesday (RT) is down about 30%.

The company has struggled lately with revenue, has lowered earnings guidance, and is closing some underperforming stores. I'm also not sure that it's done enough to differentiate itself in the crowded casual dining space.

One the plus side, the Ruby Tuesday's assets are impressive, with 368 owned locations (land and building) and another 250 building-only locations. Given the current market volatility, there may be another opportunity to grab some shares under $7, which is about three-quarters of tangible book value.

Shares of Argentine farming name Cresud (CRESY) have been decimated over the past year, down 57%. Since late March, shares have fallen from $13 to $7, due to the Argentine government's iron hand -- namely, the takeover of the oil and gas industry -- and general economic uncertainty.

I was not interested at $13 or $10 and was initially wary about going anywhere near an Argentine name, but once the stock began pulling back sharply into the $7 to $8 range thereby creating a better margin of safety, I started nibbling.

Cresud owns a formidable array of assets, and in time, the fear of investing in Argentina should abate somewhat. I'm not ready to bet the farm yet (pun intended), but Kirchner and company can't take over every industry.

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