Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Paul Senior who wrote (16315)	2/1/2003 11:34:19 AM
From: Brendan W	Read Replies (2) \| Respond to of 78505

hi, paul. With regard to my post this fall: Message 18094867 re: TSG (Sabre Group) I have not added since then. I still think the business model and valuation (pe = 10) are compelling. However, the new proposed DOT regulations are thought to significantly harm the "distributors" in favor of the airlines. On the last conference call, management professed not to be worried because historically the regulations changed "180 degrees" from the proposals. I'm going to hold (not add) unless even more compelling valuations are to be had (price < $13). re: Safeway (SWY) I'm still holding, but not adding given earnings and margin declines. Current PE is under 10. I still believe the market is mispricing Walmart's grocery "advantage" relative to Safeway/Kroger and underpricing Safeway/Krogers advantage relative to the rest of the grocers. I think SWY's higher margin, higher SKU count (i.e., selection), higher levels of service will work in the long run against Walmart. It's pretty annoying to shop at Walmart (I do) and not find the flavor you want, the brand you want, the salt-free version, etc. If you look at the institional ownership of KR and SWY you will see what good value company you are in (Clipper, Davis, Oakmark, Legg Mason, etc). re: UNM I am still waiting for the 15s to add my small position. Current PE of 7 and PB = .63. re: WIND (Wind River Systems) I still hold but doubt is building despite the valuation, prospects, technology. I wonder if their new pricing model is too generous to customers. I regret not selling my $3 stock at $6 this November. re: Siebel Systems (SEBL) Sold my $5.50 position at $7 Still holding my $16 CIT, $24 VLO, $7 URI, $17.50 RL. Sold Diamond Offshore (DO) at $22.42. Sold MONY Group (MNY) at $24. I want a lower re-entry (say $20) point given how soft its earnings have been. PB is about .51 now. Sold my $3.50 Milacron (MZ) at $4.91. Sold my $12 Robert Half (RHI) at $17. I'm looking to re-enter at $12. Fall stocks discussed: finance.yahoo.com I was active Friday buying stock. You asked about REITs. I added substantially to NHP (Nationwide Health) in the $13s. This is a triple-net-lease healthcare REIT. FFO and dividend yield is 13% (100% payout). Debt is rated weak investment grade. It is much cheaper than comparables like HCP (which I also own). Listen to their conference call this week for color on why to buy. The stock was cheaper during the last nursing home crisis (which they seemed to navigate adroitly) but i don't think a nursing home crisis is likely to happen again now. If the dividend was cut 40%, you'd still have an 8% yield. I added to Lafarge (LR), the global cement manufacturer, at $15.64. Senior debt is rated baa1, the PE is under 10, and it has historically grown earnings at double-digit rates. I will re-start Cemex (CX) shortly based on similar valuation. I bought British Petroleum (BP) at $39. PE is about 14. The five-year low stock price is about $35. I succumbed again to the siren song of thinking about China's oil consumption 10 years from now. I added to ADP at $34.58. PE is about 20. I'm paying up for earnings quality and historical earnings growth. I sold part of my position this fall at $40. I added to McDonalds (MCD) at $14.23. The PE is under 10. I tripled down on Toys R Us (TOY) at $9. Oakmark is big in this one. P/S is .17, PE is 7.5, PB is .52. The company is in the midst of a long CAPEX-intensive turnaround which seems to be working. The five-year low is $8.50. I passed on Circuit City which also looks interesting in favor of TOY. I started Furniture Brands Int'l (FBN) at $21.39. PE is under 9, double-digit EPS grower, senior debt is rated baa3. Reputation for management and earnings quality is high. I added to Cadbury Schweppes (CSG) at $22.63. The company bought the #2 gum company Adams for $4B. Senior debt is rated baa2, PE is under 9, double-digit EPS grower. I may throw my Wrigley position into this given the valuation disparity. I started Tyson Foods (TSN) at $10.28. PS is .16, PE is 9, baa3 rated senior debt. The board is in-bred and I believe insiders have disproportionate voting, but I like their market position and price-to-sales. I re-entered American Management at $11. I previously sold this at $20. The company has no long-term debt, PE about 13, market cap about $470m, trailing revenues $1010, working capital is over $200m, and I think good credentials in systems consulting for government agencies. Five year stock price low is $10. New stocks discussed: finance.yahoo.com