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

To: Paul Senior who wrote (3803)	7/6/2006 9:03:45 PM
From: Shane M	Read Replies (1) \| Respond to of 4691

Paul, on the retailers. I've got a very close eye on CHS. I also think it needs to fall more though at this point. I'm cautious about retailers in general and had vacated the sector - although I did enter COH Coach a couple weeks back as my only current retailer. CHS's daily price action is weak right now too making me think there are lots of sellers sitting on top of it waiting to sell as it moves back up. CHS seems to be in that limbo a growth stock sometimes hits where it's disappointed the growth investors, but isn't cheap enough for the value folks to step in. The marginal growth at Chicos is getting harder and harder to attain and it's pulling down their returns on equity and capital. The figures are still very good, but not the eye-popping returns they used to have. ROE dropped from over 40% 6 yrs ago to 28% now. I do some return on marginal equity (change in earnings divided by change in equity over @ 5yrs) and return on retained earnings (change in earnings divided by sum of overall earnings less dividends over @5yrs) calcs like are discussed in the book, and if I'm thinking about it right it seems CHS still gets very good results on the marginal equity it's putting to work -somewhere between 22-28% is my estimate. That said - I'm a CHS buyer when/if it gets into the low 20s. Probably starting to nibble if it hits 22. I won't be suprised if it gets there based on daily action in the stock

To: Paul Senior who wrote (3803)	7/6/2006 10:26:15 PM
From: Shane M	Read Replies (1) \| Respond to of 4691

Paul, on truck stocks... Landstar is a different than most trucking companies - they're a trucking company without trucks. Landstar doesn't own the trucks, but finds the freight and arranges the logistics for trucks that contract with them. I honestly don't know who they might compare to, but their business model is different. They're the first company in this industry I've purchased so I don't have alot of background. Like alotof the stuff I buy, I just like their numbers. I've put HTLD, KNX and then LSTR figures below. HTLD and KNX look very similar, but Landstar runs on much smaller margins, but at much higher ROE and ROTC (Return on Total Capital). y1 is most recent fiscal year. y2 is 2yrs back, etc. It's sortof like they've taken the highest value part of the business, and seperated it from the trucks. My take on it anyhow. HTLD y1 y2 y3 y4 y5 y6 book value/shr 4.37 3.89 3.32 2.76 2.33 1.93 annl chg 12.3% 17.2% 20.3% 18.5% 20.7% 27.8% compound chg 12.3% 14.7% 16.6% 17.0% 17.8% ROE 17.5 17.3 18.8 16.8 17.6 18.5 ROTC 17.5 17.3 18.8 16.8 17.6 18.6 Net Margin 13.7% 13.7% 14.1% 12.6% 12.8% Sales per share chg 15.6 12.84 18.9 15.65 8.15 KNX y1 y2 y3 y4 y5 y6 book value/shr 4.14 3.44 2.86 2.4 2.17 1.4 annl chg 20.3% 20.3% 19.2% 10.6% 55.0% 28.4% compound chg 20.3% 20.3% 19.9% 17.5% 24.2% ROE 19.2 18.0 16.2 15.2 13.9 18.8 ROTC 19.2 18.0 15.7 14.1 11.3 14.3 Net Margin 10.9% 10.8% 10.4% 9.8% 7.6% Sales per share chg 27.1 29.2 17.9 5.5 12.7 LSTR y1 y2 y3 y4 y5 y6 book value/shr 4.27 3.54 2.32 2.31 1.76 1.54 annl chg 20.6% 52.6% 0.4% 31.3% 14.3% 14.9% compound chg 20.6% 35.7% 22.7% 24.8% 22.6% ROE 51.6 40.5 34.8 36.9 38.0 42.1 ROTC 34.1 27.6 23.1 23.2 21.3 25.1 Net Margin 4.8% 3.6% 3.2% 3.3% 3.1% Sales per share chg 26.7 29.3 11.3 11.6 3.4 data calculated from AAII Stock Investor program.