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Strategies & Market Trends : Value Investing

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To: Brendan W who wrote (21284)	6/30/2005 7:40:06 PM
From: Brendan W	Read Replies (3) of 78507

Recent Activity. Bought First Marblehead (FMD) at $34 and $39. Per Yahoo, it "...provides outsourcing services for private education lending in the United States. Its integrated suite of design, implementation, and securitization services for student loan programs...." The forward PE is around 12 and it has compounded revenues at 120% the last two years. IMO, the company may benefit from a secular change toward private funding of education loans and it seems to be building a decent moat around its business. The company is designed to not take risk as a lender. The business is complex enough that I don't understand it well enough to put a lot of money in, but it's pretty interesting. Bought St Paul Travelers at $39. PE is under 9 and price to book is about 1.3 without a whole lot of goodwill on the books. Bought the New York Times around $31. Forward PE is about 16. I don't believe NYT is particularly vulnerable to loss of classifieds to the internet and the stock is at a 5 year low. Sold Natuzzi (NTZ) at around $9. Recent news has not been good and I felt fortunate to exit with a small loss. Sold Furniture Brands (FBN) at $21. Buy mentioned here: Message 18522731 Their recent decision to have retail outlets is risky or dubious depending on how much credit you wish to give management. Again, fortunate to exit with small loss. Sold Pier 1 (PIR) at $16.57. Buffett recently bought in but I've held since 9/2001 (buy price: $8.41) and the 2005 and 2006 earnings estimates produced PEs in the 27+ range. Sold Constellation Brands around $30 with a 110% gain. Current year PE is over 18 and it's relatively leveraged. I am more comfortable with BUD and DEO. Sold Lab Corp (LH) at $49 for a 70% gain and Equifax (EFX) at $30 for a 33% gain. (Buys discussed here: Message 19433079 I'm still holding Quest Diagnostics because it's organic revenue growth was less anemic than LH. With regard to EFX I benefitted from some multiple expansion and worried some about the free internet credit report requirements. Sold QC Holdings for a 12% loss (QCCO). Their recent earnings report undercut the growth story and I was chastened by their report that loan loss ratios on their de novo stores were 30 to 35 percent. Buy discussed here: Message 21308167 Closed out my Bennett Environmental (BEL) at around $3. I made 20+ percent because I swing traded it when it bounced above $4. It looks like the company will have to go back to the equity markets again this year the way it's burning cash. I'm interested in reinvesting but not until they have issued the equity or fixed the cash burn. Stocks mentioned: finance.yahoo.com

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