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 (18093)	11/28/2003 11:03:37 PM
From: TimbaBear	Read Replies (1) \| Respond to of 78644

Paul Senior Any current opinions on these stocks now? VC-- I'm still holding. Decent yield, cash flow seems to support the ability to pay the dividend, still selling well below book value. I view this as a long term hold (long enough to get to the top of the next auto cycle). TE-- I'm out of TE as I did not like either the numbers nor the tone of their last quarterly press release. It suddenly shifted the field for me to where I expect the next major news story to be some major negative....defaulting on big debt and/or stopping the dividend. Those are the only two on your list that I've got an opinion (or at least one I want to share) on. Timba

To: Paul Senior who wrote (18093)	11/29/2003 2:28:30 PM
From: Brendan W	Read Replies (1) \| Respond to of 78644

hi, paul prior to your post I added a package of stocks to increase my equity exposure: KFT, NWL, SVM, RYN, RIG, DO and added to existing positions in CX, C. Monday I'm adding to PFE, starting BMY and UU. I continue to trim the REITs but not fast enough given their continued appreciation. These moves reflect my belief that the global recovery seems real and sustainable and that I should move in the direction of my normal investment posture which is to be fully invested in common stock. Currently, I have sizable positions in short-term bonds and cash. I too would prefer better prices on these purchases, but I don't think I'm going to get them. I wasn't jumping up and down at the purchase possibilities 1-2 years ago when I was buying, and one can hardly be excited now with prices up 30+ percent. I've exited my electric utility positions in AEP and TE purchased in 10/2002 at 52% and 12% total returns respectively. I will exit my 3/2003 buy of DUK as well in 4/2004... currently, I'm sitting on a total return of 35% there. The economic outlooks look just as bad now as then for these companies, and their credit ratings have deteriorated since then. I'm still holding and not adding to Safeway (SWY) which I have large losses in (38%). I'm getting weary of betting against Walmart, but I'm not getting out at these valuations. I've cut my expected earnings growth to 3% on it, so I may lighten on price bounces. With regard to my buys: I added Rayonier to Plum Creek. RYN is REITing at the end of the year, dividend yield should be comparable to PCL's. These are starter positions for me. I would like to have substantially more money invested because I like the businesses, but their recent economic performance is puzzling, and the valuations seem miserly from a buyer's perspective. I added United Utilities PLC, a regulated UK water and electric company. Senior debt is rated a3/bbb+ by moody's/s&p. My dividend expection is $1.50 for a yield of 8.7%. The company had a substantial rights offering early in 2003, so beware. I added Pfizer (PFE) and Bristol Myers (BMY). BMY yields 4.3% and I'm expecting 12% earnings growth at PFE. I accept the widely held belief that the pharmas are priced reasonably. We'll see. I added the drillers Transocean (RIG) and Diamond Offshore (DO). They have pretty good balance sheets, but economic performance recently hasn't been good. They are trading near 5 year lows. DO allegedly has mostly finished a substantial CAPEX program freeing up future cash flow. Regarding Kraft Foods (KFT): this seems okay to buy at with an earnings yield of 6% if you accept management's expectation of 8% earnings growth and senior debt rated a3. It's less appealing when you consider that earnings are only supposed to grow 1.5 percent in 2004 and you're buying into a minority ownership position to Philip Morris and you are vulnerable to Walmart squeezing supplier margins further. Regarding (Newell Rubbermaid) NWL: I don't quite get why earnings are supposed to be flattish in 2004. For me this is somewhat of a faith investment in the CEO, Joe Galli. Earnings yield is about 7%, dividend yield about 3.7%. That's all for now. Again, these buys are more of a macro call on my part. I don't really like the prices... I just can't find stuff I like better. Stocks discussed: finance.yahoo.com