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Strategies & Market Trends : Value Investing

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To: Madharry who wrote (20092)	11/22/2004 2:08:08 PM
From: Paul Senior	Read Replies (1) of 78530

I'll start an exploratory position in Korea Electric Power (KEP). Madharry, were you the person who posted on a couple of Korean stocks? I don't remember, and SI search engine doesn't go back far enough to check. Would you (or anyone else here) have a comment on KEP? The stock's come off a base and is at a multi-year high. I don't like that --- maybe buyers now have missed the party. (S&P, 8/12/04 said avoid the shares @$9.54 for their 12 mo. target at $7. KEP's risen over $12 now.) Profit margins for this company are pretty good, when I consider KEP's current and forward (estimated) p/e. (Margins range 8-14% approx. over the past 6-7 years.) And while roe is generally poor (often between 4-6%), that roe number is off a book value that is often twice what the stock sells for.(i.e. roe on purchase price is higher than 4-6%). There's also about a 3% dividend yield (according to the Wall St. Journal - Yahoo isn't clear). According to what I read, "the company generates substantially all of the electricity consumed in Korea." A monopoly position countervailed by the government. Perhaps that limits KEP's profits or business, but maybe it also means the gov't has an interest in seeing KEP kept profitable enough.

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