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Strategies & Market Trends : Value Investing

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To: - with a K who wrote (26997)	9/6/2008 12:57:05 PM
From: E_K_S	Read Replies (2) of 78764

Hi - with a K You posted on 6/2/07 that you started a position in Ultrapar Holdings Inc. (UGP). Do you still own your shares? Would you buy more at current levels? I like the business sectors that the company serves. The dividend yield of 3.4% (at a 33% payout) is attractive given the potential growth of their businesses but the company carries quit a bit of debt. One interesting item that caught my eye is that 49.5% of the company is held by the Igel family (through two holding companies). The special governance features for this ownership block expires on 12/16/09. It's possible that the board will renew these governance terms but more than likely some other arrangement will be made to cash out (all or part) of the Igel family's holdings which should create higher shareholder value. Debt is carried at 52% in foreign currency and 42% local currency with a duration of 6.1 years. At $1,497 million in total debt this represents $11/share or about 32% of the common share price. ultra.com.br Net cash flow was negative in 2008 but should improve substantially through 2011 since their long term debt duration was extended. At current growth rates this debt should become quite manageable as their net cash reserve increase. Business company profile: reuters.com Key company ratios vs sector: reuters.com Is this a value opportunity or one that should be avoided? EKS

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