Hi Paul - Took my small profit on Aqua America Inc. (WTR) collected my 2.7% dividend and put the proceeds into SUPERVALU Inc. (SVU) which now yields 6.2% (xdividend date 11/26). This is an IRA account so dividends are important for the portfolio.
However, SVU keeps hitting new lows so my strategy may be wrong especially if SVU cuts their dividend.
Pretty sour market but held my nose and doubled my small position in Ultrapetrol (Bahamas) Ltd. (ULTR) after I read their earnings report released 11/12/2008.
Here are some of the highlights that caught my eye:
-- Recorded net income of $15.1 million, or earnings per share ("EPS") of $0.46, for the third quarter of 2008, compared to a net loss of $4.7 million, or EPS of ($0.14), in the third quarter of 2007;
I believe their River business will see excellent growth even in a global slowdown as the regions soy beans harvest is growing at 9% and has to be transported (via river barge to the ports). Just hope for rain so the river levels remain high.
From their most recent report:
"...The Company experienced a 14% increase in the volume of cargo loaded in the third quarter 2008 as compared with the same period of 2007...
...The latest 2008 USDA estimate for the Paraguayan soybean crop of 6.8 million tons suggests production growth of over 0.6 million tons, or 9.7%, as compared with 2007, and USDA further projects 2009 crop in Paraguay with a production of 7.2 million tons or an increase of 5.9% over 2008. Industry sources indicate iron ore production at the three mines located in Corumba, serviced by this river system grew substantially in 2008. However, the present global economic crisis as well as low water levels in the High Paraguay River may reduce the volumes transported in the fourth quarter of 2008.
The Company continues with the progress in the setting up of its new barge building yard, which is planned to be in production by second quarter of 2009. The Company's yard at Ramallo is currently using 70% of its capacity for refurbishing the existing fleet in order to have the maximum number of operational barges for the 2009 season. We expect that with only 30% of the capacity devoted to this task during the first quarter of 2009 the pace of the 130-barge enlargement program will slow down but we still expect to be able to complete the program by end 2010..."
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ULTR seems like a great value buy at $2.31/share. According to YAHOO BV is now $7.35/share and the forward PE is a screaming 1.69!
At this point, the market does not seem to care about value, earnings or the future prospects of many of these small very profitable companies. A shrewd investor will look over the deep canyon ahead and out to the much greener pastures in the distance.
I have been wrong many times but I doubt this company will go BK.
EKS |
