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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (37819)	5/7/2010 2:11:44 PM
From: Kapusta Kid	Read Replies (1) of 78702

Paul, you got my attention with TOT. That 6%+ divvy certainly looks attractive. And safe. Free Cash Flow took a hit in 2009 and ROEttm has fallen off, but most metrics look good. There's a fair amount of cash on a very solid balance sheet and the company has grown shareholder equity at about a 12% compounded rate over the last decade. Plus, according to the last quarterly report, TOT has reduced debt substantially. The bad news is in the chart. What we've got here is a splendid example of a falling knife. finviz.com finviz.com I've tried to catch a few in my day and I don't find it too pleasant, but most times that's how you play the value game. Low 40s looks like a real possibility to me, although a small entry position doesn't seem like a bad idea. I don't know what kicked off this decline since January. TOT missed earnings by a few cents recently; the rest is probably due to dollar strength and/or the Euro zone rolling over. I'll be a buyer, probably sooner rather than later, plus I see an opportunity to acquire other solid Euro multi-nationals coming up. Meanwhile, I'll read the Morningstar and S&P reports on TOT. My only other exposure to energy at the moment is a longer term holding in MRO. I exited ATPG last fall for more than a triple, but it's back on my watch list.

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