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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (25199)	11/6/2006 10:47:58 PM
From: Spekulatius	Read Replies (2) of 78702

Bought some WLT -a conglomerate. Interests in Water infrastructure, Coal, some gas and housing. The water infrastructure company (MWA) will be spun of to existing shareholders and represents a good deal of WLT's market cap. MWA appears to be doing fairly well. With 1.94 shares for each MWA shares that is worth 27$ roughly. The valuation of the Stub (sans MWA) should be around 700M$. For that WLT shareholder will own a profitable coal company (560M$ revenue 160M$ operating earnings) and a homebuilder that is in turnaround and mode 10M$ during the last quarter. From the numbers above i conclude that WLT is substantially undervalued - the coal business by itself is worth at least 1.0B$ so even if we discount the homebuilding business totally the sum of parts is worth more than the current market cap. Why is the stock down? I believe Pirate Capital may have been a seller, due to their own problems. That should not be a deterrent for a value investor, IMO.

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