James Clarke
Asbestos. I stopped right there. Thanks for the idea.
Thanks for the enlightening critique!
From the SLS 10Q:
"....6. Legal Proceedings
The Company is a defendant along with a number of other parties in approximately 100 lawsuits as of December 31, 2000 (approximately 200 as of December 31, 1999) alleging that plaintiffs have or may have contracted asbestos-related diseases as a result of exposure to asbestos
products or equipment containing asbestos sold by one or more named defendants. Due to the noninformative nature of the complaints, the Company does not know whether any of the complaints state valid claims against the Company. The lead insurance carrier has informed the Company that the primary policy for the period July 1, 1972 , July 1, 1975 has been exhausted and that the lead carrier will no longer provide a defense under that policy. The Company has requested that the lead carrier substantiate this situation. The Company has contacted representatives of the Companys excess insurance carrier for some or all of this period. The Company does not believe that the asserted exhaustion of the primary insurance coverage for this period will have a material adverse effect on the financial condition, liquidity, or results of operations of the Company. Management is of the opinion that the number of insurance carriers involved in the defense of the suits and the significant number of policy years and policy limits to which these insurance carriers are insuring the Company make the ultimate disposition of these lawsuits not material to the Company's consolidated financial position or results of operations....."
After all the years this asbestos-related liability litigation has been occurring, I believe it a "mature market". I'm inclined to believe the company's statements regarding their exposure and I make my investment decision based on the merits of their business fundamentals. I believe the investment provides an adequate margin of safety, nice potential for appreciation, and a nice dividend while I wait Mr. Market to cast a favorable eye.
Timba |
