Watching from the sidelines

Posted on July 3, 2006 , filed under Stocks | Print This Post

I am employing a wait and see strategy to determine if the current rally in the market has any sustainability. I may have found one interesting situation. I am currently watching Logitech International S.A. (LOGI). The company engages in the design, manufacture, and marketing of personal interface products for personal computers (PCs) and other digital platforms. The company’s products include Web-cameras, mice, trackballs, and keyboards for the PC; interactive gaming controllers, multimedia speakers, headsets, and headphones for the PC and for gaming consoles; headsets for mobile phones; headsets, headphones, and speakers for mobile entertainment platforms; advanced remote controls; digital writing solutions; and 3D control devices. Logitech has recently announced a 2:1 stock split effective July 14th, 2006 and a $250 Million share buyback initiative. In spite of these two pieces of normally positive information, LOGI has been down since the announcements. Logitech has cash of $245 Million and long-term debt of $14 Million. I am a fan of Logitech products and believe the release of Microsoft Windows Vista will create a surge in demand for PC accessories such as mice and keyboards. It may be worthwhile to look at building a position in LOGI.

I am still advocating building a position in gold mining stocks, during what I consider uncertain times. Gold is currently trading at $623.20.