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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (19858)10/14/2004 10:27:30 PM
From: Spekulatius  Read Replies (1) of 78620
 
Sold my DFNS.OB into todays crazy rally. Here is some info about USLM, in case somebody is interested. USLM is a lime producer. it own a few lime quarries in AR, CO and TX. Lime is used for constuction, paper production and steel, all of which seem to be booming now. As Peter Lynch pointed out, quarries are one of those business having somewhat of a moat, because of difficulties to obtain persmission for quarries and transportation costs. Most construction material companies trade at pretty nice PE's. USLM is a dinky little company of course. Lot's of debt 9some as high as 14% interest) but after concluding an investment progeam to get quarries up to snuff, the companies generates pretty improseeive FCF and pays back debt. The recent refinancing will reduce interst rates payments substantially, to about 2.5M$/year. This will improve the bottom line quite a bit. Also EOG has obtained drilling permist on USLM properties and pays over 1M$ upfront and 1/5 of the revenues as royalties (if there are some). What I am hopping is that this companies get's further on solid ground financially and that the FCF finally leads to a revaluation of the stock.

finance.yahoo.com
The last 10Q
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The oil and gas leasze agreement with EOG:
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