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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (8064)	8/28/1999 2:43:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78822

Comments on stocks in this week's Barron's Bill Nygren article: Bill Nygren, "a value-oriented investor (who) specializes in sussing out erstwhile growth companies that have been left for dead" is manager of the Oakmark Select fund. I'm going to mention some of the stocks in his top 10 holdings (as listed by Barron's), because most of them have been discussed here (or on the Buffett thread), and there may still be some interest for us. Also, I've been thinking about one in particular and would like to bring it to the thread's attention for any comment. (Aside: man, does this guy run a concentrated portfolio- the 10 stocks are almost 2/3 of the whole thing.) USG: Discussed briefly here last year (? )I think. At the time, some of the media pundits (in Barron's!) thought there was a big shortage of gypsum wallboard - one of the few things in building industry that was going up in price (so recommendation in Barron's was to buy the largest producer-- USG) Now we're seeing additional supply (from others) coming in. Stock is down from its high. It's Nygren's biggest holding (according to Barron's) and "his most contrarian play". REY: Discussed here 2 years ago by me at lower prices. I still have a small position A number of paragraphs are taken up in the article to say: REY is selling for a low pe and benefits from it's internet venture with Microsoft, and with the consolidation of the car business. They are a management info. sys. company dealing primarily with major car manufactures- also (not discussed in article) they are expanding into the health care industry. Also, imo, REY are very tough business people (afterall -g-, everyday they have to deal with car salesmen), and the company does have a history of generating profits. And the stock, imo,is undervalued. However, the car business is stable or declining,and the health industry info. sys. business is competitive and so, I would not be a buyer of REY here (unless just playing for a 2-3 point short-term gain). Washington Mutual (WM): A Mike Burry pick, and Mr. Nygren's #2 holding. Thermo Electron (TMO). I like the stock here at the current price. I have a position. A bet that they will successfully, eventually consolidate their operations and that there are some profits to be had in fewer number of businesses and better management of their technology expertise. (So far, the bet is not working out.) Ralston Purina (RAL): discussed on Buffett thread Partner Re: I looked at it and passed. Having some profit problems this quarter. But selling below book. I'll try to remember to relook after hurricane season. US Industries (USI): Seems like I look at this one every year or so and never can get any enthusiasm for this conglomerate. They just seem so mediocre. I would not by it at current price, unless somebody could offer a compelling reason. Dun and Bradstreet (DNB). Well, I've been thinking about it for a couple of weeks. Price has come down. PE might even be reasonable. They have a couple of things going for them which fit into a Buffett model (maybe): Brand name (in addition to 'get me a D&B on them', they also own the profitable Moody's). Consistency - been around a zillion years. Moat?-- Pretty hard to avoid them when you need the info. they provide. What I don't like is: lots of negativity about crummy management on Yahoo. And it does seem like the managers are entrenched, slow, complacent (which of course is way away from what Mr. Buffett seeks). Which affects my belief that this quarter's lousy earnings could be or would be recovered as the business plans and/or management's corrective actions kick in. In the 10k, there's a little note saying the gov't is suing for back taxes and if they prevail, it's very possible (to me) that a big surprise hit to the stock will occur if the gov't does move closer in on DNB. I need to get to a Value Line-- can't find a long history on the company due I think to some transitions. Meanwhile, anybody out there with an opinion? Paul Senior