7th post on PWER: Agree with Jim and Twister. When the momentum cools, PWER may be an excellent short.
The power supply business is characterized by many companies which compete on price. (That's one reason why they're outside USA.) And they are a mundane business. As far I can tell, there's no proprietary advantage one company has over another. In times like now of part shortages or alleged shortages, I'd guess the bigger companies which have resources to expand faster, do better. And PWER may be one such company. That might also though be a reason to revisit (per Mike B) Emerson, EMR, which IS a possible Buffett type stock (imo). Here you have a most formidable competitor with money and resources, and broad geographic exposure. And an aggressive ability to gain strength in an area where barriers to entry are small. But it has no momentum (imo) or pizzazz (apparently, imo). (I have no position in this stock.) emersonnetworkpower.com
I would be very interested in hearing from anyone else from the Buffetology thread other than jhg, who is actually buying PWER at its current (80+) level and buying for Buffett type reasons. I will try to hide my shock and surprise and attempt to fathom the why such a person would consider this company (at its price) similar to stocks Mr. Buffett buys and why, of all the possibilities out there, this stock is ripe for a Buffett type buy.
the stock may very well go higher from here and... I've been wrong many, many times -- but not about pwer being unsuitable as a Buffett stock. |
