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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (32778)	11/18/2008 5:51:32 PM
From: E_K_S	Read Replies (1) of 78660

I nibbled at a few of the beaten down companies recently discussed. They include: OSK, MIC, FR and DD finance.yahoo.com MIC is my lottery ticket. I believe the bad news is in after the company announced a 70% dividend cut (from $0.69/quarter to $0.20/quarter). Management stated that this was the prudent thing to do so they could build up their cash reserves. At June 30, 2008, the Company had $1.5 billion of long-term debt, $1.3 billion of which was hedged with interest rate swaps, $58.7 million of which was hedged with interest rate caps, $92.6 million of which was unhedged and $6.4 million of which incurred interest at fixed rates. Much of this debt is pegged to LIBOR which has finally stabilized so future debt payments are pretty much fixed. I believe the risk now is if their is sufficient cash flow from operations to cover their future debit obligations IF there is a protracted (several quarter) down turn in the economy? At $3.60/share, the company is selling at 80% below BV. The company can eliminate their dividend and/or sell anyone of their separate business operations to survive (if need be). The remaining business operations would still produce excellent revenue streams that would result in lower overall long term debt. At the current price a "worst case" outcome still makes this an attractive value opportunity IMO. Oshkosh Corporation (OSK) continues to be attractive at current levels as the company trades near a 10 year low. Their stated dividend is now almost 7% and the estimated forward PE is 2.5. An economic down turn may reduce their future earnings but they should have sufficient cash flow to service their future debt obligations. The company began construction of a new manufacturing plant today in Tianjin, China where they will produce aerial work platforms ( finance.yahoo.com ). First Industrial Realty Trust Inc. (FR) is selling significantly below their stated BV. Shidler Jay H a Director bought 1 million shares Nov 8, 2008 valued at $9.95 million. This purchased ranked as the No. 1 of the top 10 insider purchases from the recent SEC disclosure. ( thestreet.com ) Two other insiders also made large purchases at prices around $10/share so at today's close of $6.45/share it appears like a bargain. EI DuPont de Nemours & Co. (DD) now yields over 6% so I picked up a few more shares as I build my position. =============================================================== Paul has Aqua America Inc. (WTR) reverted back to it's mean or is $22.5 your target? The stock is closing in on it's 52wk high of $23.10. I might take my profits and buy some of these other super value propositions. What's your view? EKS

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