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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (34804)	6/24/2009 9:05:47 PM
From: E_K_S	Read Replies (1) of 78627

RE: SUPERVALU Inc. (SVU) also look at EI DuPont de Nemours & Co. (DD) or DU PONT E I 3.50 PFD (DD-PA) I have been thinking the same thing. I have a good position in booth the taxable and IRA account and want to stay diversified. My last buy was at $13.50 (4/09/2009) as this provided a 5% dividend. SVU has a new CEO as of last quarter, so I am not sure if this warning is as a result of business conditions or just that the CEO is cleaning up the balance sheet. They are seeing customers much more price sensitive resulting in lower sales volume and this has hurt the current quarter earnings guidance. The company has been working on implementing a strategy of using more of their own "branded" products which yield a higher overall profit margin but takes time and $'s to implement the concept. I want to see if the dividend is safe and see what the new CEO's view is on future dividends. I will probable add a few more shares on any significant sell off in a similar amount to what I bought on 4/09/2009. My position in the taxable portfolio is a 2.2% holding while the IRA portfolio is a 3.3% holding. The company has a fall back position in selling one or more stores they acquired in the Albertson's deal (and there has been interest) but this is not the environment to be selling stores. Long term, the company acquired excellent properties at a very fair and undervalued price with their Albertson's deal (cherry picking the best properties and selling off the others). This is when SVU was selling at $32.00/share (on 1/23/2006) and paid $0.16/share qtr dividend). Now at $13.80/share, there appears to be even greater value than in January 2006 and they have raised their dividend to $0.17/share. SVU a BUY below $13.00. The dividend yield would be 5.3% ============================================================ I am also eyeing DU PONT E I DE NEM (NYSE: DD) below $23.00/share. I like their investment in the Solar business with a plant in China that is now producing product. This investment slipped under the radar and is growing double digit even in this lousy environment. ( Message 25325225 ) . The company also continues to grow their hybrid seed business in Pioneer Hybrid. They do a lot of business in Latin America w/ thei hybrid soybean product. This division is selling at a much lower multiple than Monsanto. Management has weathered the economy storm well and has not cut their dividend when many others have. They have increased their investment in China building a 2nd plant to come online soon. At current depressed prices, you get good exposure to China & Latin America while collecting a very nice dividend. I have also been looking at their $3.50 Preferred A shares (DDpA) which below $50/share yield 7%. You give away some upside but do lock in a pretty good yield. My taxable portfolio is holding 2.4% DD and I am thinking of increasing this by adding some more common shares and/or starting a position in the Preferred A shares if the price trades low enough. Dupont is a BUY below $23.00. The dividend yield would be 7.1%. Dupont Preferred A shares below $50.00. Yield just over 7% =============================================================== The market may provide another great buying opportunity in the next 90 days so I have been building up cash and updating my watch/buy list. Both SVU and DD are on my list. EKS

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