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

To: Paul Senior who wrote (16329)	1/31/2003 10:12:42 PM
From: Spekulatius	Read Replies (2) \| Respond to of 78564

After the CVX earnings report, i regret my move from MRO to CVX . The stock has recovered today. In my opinion, the excuses from CVX's management team were pretty lame. I am surprised about CVX's loss in marketing and refining, bothe XOM and MRO had pretty decent earnings in this business despite the more difficult environment. What to do now? Stick with CVX or move back to MRO? I have put GD on my watchlist, as I am looking for "Iraq war" hedge stocks. Pretty decent valuation (P/E=13).The fools have a pretty good writeup about GD: fool.com

To: Paul Senior who wrote (16329)	1/31/2003 10:27:50 PM
From: Paul Senior	Respond to of 78564

I've started a very small position in Greif Brothers (GEF). The company will be familiar name to old-time value players because it was mentioned so many times as a long-term buy-and-hold by Phil Carret, a 'grand old man' of Wall Street,who worked and invested until he died when he was in his late nineties.) I notice that Pioneer Investment Management, which I believe is the manager of the Pioneer Fund which was started by Mr. Carret, still holds a substantial position. As does Carret and Co. However, they have reduced their holdings according the the latest report I see. Another negative for me is that debt/eq. has been increasing. Also, it's a thinly traded stock, and it's difficult to get outside information on it. I like that GEF sells below book value (which it seldom does) and at a relatively low p/sales. The stock is hitting new lows. Per Yahoo, "Greif Bros. Corporation and its subsidiaries principally manufacture industrial shipping containers and containerboard and corrugated products." I assume this business is related to the US economy and trading partners. So I assume business (earnings) for GEF will be better if/when the US economy improves. Small buy only now. Paul Senior I've not owned the stock before, and I could be very wrong to be buying it now. yahoo.marketguide.com

To: Paul Senior who wrote (16329)	2/3/2003 8:56:33 PM
From: Investor2	Read Replies (1) \| Respond to of 78564

Here's an interesting way to handle the asbestos liability: "Honeywell asbestos deal may be copied Sunday February 2, 7:30 pm ET By Christopher Bowe and Andrew Hill in New York Honeywell's deal last week to escape asbestos exposure by selling its Bendix unit to a company in Chapter 11 is a creative use of bankruptcy law that could be repeated by others, legal experts said. Federal-Mogul, a vehicle components maker under bankruptcy protection for asbestos liabilities, will take on the Bendix brake pads business, which has about $1bn in annual sales, solely in exchange for assuming its asbestos liabilities. The acquisition sets off a process where Honeywell can receive a court order barring any more claims against it related to its ownership of Bendix. Such a move is potentially the first where a debtor made an acquisition with asbestos liabilities and helped the seller. "When the debtor makes an acquisition, everything else flows," said David Berkin, attorney at Kirkland & Ellis in Chicago. "Depending on their circumstance, other companies would be interested in this structure." That circumstance depends on finding a willing buyer and seller, with an asset that brings value to the group in Chapter 11. These liabilities are then added to Federal-Mogul's existing pot of asbestos claims, which are paid for by a trust set up in bankruptcy reorganisation. Emerging from bankruptcy, Federal-Mogul is protected from future claims, and by extension Honeywell would receive the same treatment. Honeywell has a $2bn insurance provision that can be used to pay future claims against Federal-Mogul. Federal-Mogul's deal was reviewed by its bankruptcy court judge and received considerable support from its creditor committees. It plans to emerge from Chapter 11 this year with the asbestos claimants owning 50.1 per cent of its new shares in a trust to pay out liabilities. Existing noteholders will own the remaining 49.9 per cent of the company. "This is a good deal for everybody concerned. It makes sense for the claimants. It makes sense for Federal-Mogul. And it makes sense for us, and common sense is likely to prevail," David Cote, Honeywell's chief executive, said. Many otherwise healthy companies face significant asbestos exposure through units, but cannot, or will not take the whole group into bankruptcy. Recent studies estimate nearly 60 companies are in bankruptcy protection due to asbestos claims, while asbestos-related litigation costs could reach $275bn. Honeywell recently struck another settlement for its Narco unit, following settlements by ABB, Halliburton and Sealed Air. One person close to negotiations in those deals said no one wanted bankruptcies and "the sound rational approach is to make compensation available now". For example, ABB would have been litigated for at least 10 years in 12 different countries without a settlement." Best wishes, I2