Jim,
So USU is public, at around 14 1/4, near the low end of the range.
I read the prospectus and am less than impressed. At best I see
a company selling for a mild premium to book. The dividend is based
on a very high payout, and looks like it's around 7.7% at present.
They repeatedly state that pricing pressure is intense, and admit
that hey, it's a commodity with 4 major producers worldwide and
with government regulations and national loyalties complicating the
picture.
It transfers its depleted UF costs to the government today, but
it also pays off a huge chunk of its cash. I see basically stable to
very low growth over the next 10-15 years, and the prospectus
states that if anything the numbers are declining recently.
So it looks like an attractive utility-like company for a decent
dividend, but I don't see a dollar for 50 cents. Of course, maybe you know something about the value of their inventories that I don't.
I didn't see it in the footnotes.
BTW, New Holland is just getting crushed. New lows are becoming
frequent and they're adding up, if slowly. I only have a $2200
position, so I'd buy more, but I'm concerned that I'm missing
something that the Street is getting. If you hear any scuttlebutt
I'd love to hear it.
I like a tech company, Asyst (ASYT). Why I like it is up on
my web site. Basically, as a contrarian, I can't resist the
semi equip sector now, even if it is tech. Given my recent history,
that means everyone reading this who likes the idea should wait
3 months and get it 30% cheaper ;)
Good Investing,
Mike |
