I'm buying PLL & ESR
Pall (PLL) manufactures fluid filtration systems for a variety of industries. I'm starting a position because the stock fits a relative dividend model that I like. PLL is in a growth business (maybe), has a relative (to itself) high dividend yield, and a very good history of increasing its dividend every year.
Encompass Services Corp. (ESR)"provides a portfolio of electrical/communications, mechanical, janitorial and maintenance management services to commercial, industrial and residential customers nationwide" (per Yahoo). I'd guess this is a very competitive business for the janitorial aspect, since there's not much barrier to entry (except that mom 'n pops can't get national contracts). I am going to presume that having a nationwide presence and staff of electrical and mechanical construction people is a valuable asset not easily duplicated, and that these people will be in short supply and remain so as long as things don't get worse than a "soft landing". A positive that I like, from their 2nd Q report: "Our expertise in providing infrastructure for voice and data communications projects has been a strong draw, pushing total backlog to $1.8B."
ESR's struggling (imo)with a merger. It has a stated (not tangible) book value of about $12. IF they could just earn 8% on it (ROE), that'd give about a buck a share on a stock that's selling at about 3 3/4. IF they could, then the stock is cheap now. Imo, of course.
Also fwiw, I'm taking more profits in Abbott, starting to take profits in Cadence Design, and taking some losses in CXSN (might be a buy here for others- I've lost patience and also want tax losses). I've closed my exploratory position in Delta Airlines at a slight loss. (still have positions in other airlines though). I'm also slightly trimming some tech stock losers.
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LR is a buy imo for those who will bet the deal closes and who will be happy with 1/4 on 2 3/4 within a few months.
Paul Senior |
