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

To: Jurgis Bekepuris who wrote (21725)	7/21/2005 1:07:33 PM
From: Paul Senior	Respond to of 78659

Jurgis Bekepuris. SXT. Sold my position immediately upon reading the bad quarterly results. Looked again after the drop and decided not to buy. Re-looked after your mention here and changed my opinion. I'll take shares at current price. Lowered expectations for '05 not good. This company makes scents and flavors. My assumption has been that these things are small components of what goes into Sensient's customers products and also or consequently are almost insignificant to the customers' costs of goods sold. Therefore, I would assume Sensient has some pricing power - if they raise prices customers aren't really affected enough to complain. But given the earnings drop now, and the sluggish earnings performance of SXT over the past few years, I guess I have to assume I am wrong and that SXT does NOT have pricing power. The earnings number that mgmt expects is $1.37-1.40/sh., giving a p/e of 13.7 now. That is above the average p/e that this stock has traded for in the past three years. In addition, I'm not sure why we have any justification for believing management's earnings projections. OTOH, the p/sales ratio under 1.0 (which Yahoo shows) is fairly rare (low) for SXT, as is the p/bk number of 1.4. Additionally, book value seems to increase most years. I don't have much faith that the stock will do much more than plod about in a narrow range. OTOH, the stock seems at a low point, the company has been profitable in each of the past ten years (at least) and has had decent profit margins, so I suspect and will bet that the stock will eventually move up within its apparent trading band. finance.yahoo.com

To: Jurgis Bekepuris who wrote (21725)	8/5/2005 8:34:53 PM
From: Paul Senior	Read Replies (3) \| Respond to of 78659

Upped my SXT position today. Stock saw a 12 month low today. I'll add more if stock drops more on no adverse news. finance.yahoo.com I'm fairly confident about this one. OTOH, there's not much correlation between my confidence level and my success level. Also, as mentioned, this stock hasn't done much for many years, so perhaps gains in the stock - even if they should occur - might be very small. I will go after those gains nevertheless. jmo, and of course I could be wrong.