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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (35938)	9/1/2010 4:40:46 PM
From: E_K_S	of 78741

Closed out my position in Southern Union Co. (SUG). Based on the Citicorp report posted 11/14/2009, I sold half of my SE and moved the proceeds into SUG. SE continues to perform very well from when I first acquired my shares on 2/18/2009 at $13.28/share. Dividend 4.9%. Forward PE 12.41. SUG dividend is 2.6%. Forward PE 11.26 Based on the Citicorp switch recommendation: SE switch date 11/16/2009: $19.25 to $21.00 (price as of 9/1/2010) + 9.1% SUG switch date 11/16/2009: $20.53 to $23.43 (price as of 9/1/2010) + 14.13% SUG's Net Income/LT Debit ratio is almost twice as large as SE at 16x. SE's Net Income/LT Debt is 10.7x. Both are a lot higher than I would like. I like to buy when it is 4x or less. ================================================================= Therefore, the Citicorp "switch" recommendation did yield about a 5% overall return higher but when adjusted for the difference in dividend yield the gain was a modest 2.5%. I continue to hold my SE position with my low cost basis. My dividend Yield on Cost per share is 7.5%. No plans to add more shares unless SE falls below $18.00/share. ================================================================ Sold 50% Chicago Bridge & Iron Company N.V. (CBI) to lock in recent gains and maintain my lower cost basis. Sold 20% of Ultrapetrol (Bahamas) Ltd. (ULTR) to harvest the last of my losses and lower my overall cost basis. Will try to buy back these shares in 31 days. My cost basis is now $4.65/share down from over $8.50/share. I am very positive on this company and believe 2011-2012 should see ULTR sell in the double digits. EKS

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