Re: Sealed Air
Paul, like a previous poster I have bought next to nothing over the last month. I can't get excited about anything. I may feel obligated if we get some more rate cuts. Since my last post, I kept adding to the Sealed Air bringing my cost down to $32. I cut my exposure to insurers SAFC at $31 (my cost $20) and MONY at $47 (I had the $23 IPO) and to the homebuilders Ryland at $41 (my cost $16) and Pulte at $43 (my cost $16). These gains were all taxable. I took some tax losses in JCP, PBY and IFF, but I'm still long.
I sold two-thirds of my $4.50 SKO at around $7 (non-taxable account). I sold my $38 BAC at $48 when I heard their bad loans might be from the California utilities... not just from economic cyclicality (again a non-taxable gain).
I've added mostly energy companies... two refiners on a P/E basis in the 8 to 10 range... Tosco at $33 (currently $42) and Ultramar Diamond Shamrock at $30 (currently $35)... I added Conoco on a PE basis as well at $26 (currently $28)... and TXU Corp on a PE basis at $36.
I stepped up my investments in the asbestos plays when Buffett sprinkled his holy water in the area [credit another poster for this characterization] last fall adding to USG, OI and CCK. I have turned the OI into the black after initially buying in the mid 20s, but I'm still down substantially on the other 2 (like 30 to 40 percent). I'll add more USG if I can get Buffett's price (mid teens).
I made I think an interesting investment in E-Trade Group at $7 (currently $13). The company was approaching book value, is doubling its accounts annually, had a large short position, and is clearly one of the top 3 discount brokers. The company is second only to Schwab in international presence. Its market cap was around $2 billion... I don't think it has much debt... and I figured surely some foreign bank would want it at some point for at least $4 billion.
I had previously bought OfficeMax at $8 on a price-to-sales basis. After the Barrons article I brought my cost down to $2.50 (currently $3.75). The sales per share is around $45 with no debt. The book is around $9. The CEO says he won't sell for less than $20.
I turned around my $20 Champion Enterprises position by loading up at $3 (currently $6). Book is around $9; sales per share around $40.
I began a position in Cemex (CX) at $19 (currently $21). I think the company has a great track record. It has a fair amount of debt but the PE is under 6. It is the number 2 cement manufacturer worldwide, second to Holderbank. It has at least doubled EBITDA over the last five years.
I bought Harte Hanks at $22. I don't like their "penny shopper" publication business because I don't understand it. Their direct & interactive marketing business is well thought of, though. Their earnings of around $1.30 is almost all free-cash-flow.
Check my facts, please, before using them. I do this from recall which in my case is not very good. |
