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Strategies & Market Trends : Value Investing

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To: Sergio H who wrote (45521)	11/16/2011 8:44:42 PM
From: E_K_S	Read Replies (3) of 78473

Hi Sergio - Some what OT - Where's the value play (or what companies gain value) if we see a strong U.S. dollar trend for the next several years? I say this based on next week's 'Super Committee' Nov. 23: Deadline for the committee to vote on a plan with $1.5 trillion in deficit reduction.(Timeline to Reduce the Budget Deficit: Message 27761685 ). These cuts will cover the next 10 years and represent a significant change of trend IF real cuts are approved. This will result in a stronger U.S. dollar compared to many other foreign currencies and will impact the "Value" of companies that can generate significant FCF in U.S. dollars. In addition, companies that own debt that must be paid back in U.S. dollars are at a disadvantage if their products or services collect non U.S. dollars. I have been putting together a list of those companies (mostly domestic U.S. companies) that fit this category. A few already meet my value criteria but there are many others I probably have over looked. Let's start naming a few candidates and see if they would be the beneficiaries of an added value pop if the U.S. dollar gets stronger. Here is my contribution: Waste Management, Inc. Common S(NYSE: WM ) finance.yahoo.com Forward PE at 13, dividend yield 4.3%, LT debt is 2x the amount I would like based on annual net income BUT all income is invoiced in U.S. dollars. Their fleet of truck (their major operating expense) is working towards converting their trucks to run on NG. Disposal sites are being converted to capture methane generated from the waste which is used to generate electricity to run their facilities. It's a well integrated system being transformed for the 21st century. Almost $1B of U.S. dollars that increase in value for possible foreign acquisitions. They already have operations in China which could be expanded. I also like several of the domestic E&P companies in a rising U.S. dollar environment. There must be other candidate companies. EKS

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