Mike, a few points.
UST may be a value, but don't believe they are shareholder friendly. The headquarters is cushy, they spend money like water. And they are incredibly overcapitalized. This should be an LBO waiting to happen - that is your upside - but management doesn't seem to have the guts. Somebody else would do it for them, but I think current management has built impediments. Check the proxy.
Philip Morris. mmmmm I am close. But don't kid yourself, even at 30 that there is no margin of safety. Before all this tobacco legislation stuff started (a year and a half ago) I got the rare opportunity to ask Michael Price a question, and asked him if he was in tobacco stocks, and he said no, there is no margin of safety under Ben Graham's criteria because the important liabilities not just off balance sheet, but also unquantifiable. I have not owned Philip Morris since, which saved me a $10 a share loss so far. I am still not back in, though getting tempted big time.
Buffett spoke his own words again this weekend, and in my interpretation said, stay out of U.S. stocks. He can't say that anymore, but to anybody who really understands him, thats what he said.
Jim |
