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

To: Paul Senior who wrote (17428)	7/18/2003 9:26:16 PM
From: Spekulatius	Respond to of 78601

NSRGY looks like a better pick than my CSG. I'll keep CSG for now and start an exploratory position in NSRGY. Nestle is very reasonably priced here: Investment return is: Organic growth : 3.5-4% Inflation: 2% (to compare it with bonds) Dividend yield: 2.6% They should be able to get another 3-4% growth through acquisitions financed from FCF. Based on that my expected investment return would be 11-12.5%. Nestle has a AAA credit rating a long operating history, negligeable dilution through stock options, so i consider 11-12.5% LT expected return for a stock with these characteristics and excellent deal. I know a lot of people bulk at these types of returns. I would like higher returns as well but i have to accept much higher risk to get this. An right now, 30year bonds trading at 5% yields... CSG does not look bad either but at these prices I prefer NRSRG and UL/UN.