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

To: Spekulatius who wrote (31375)	7/4/2008 2:36:47 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78740

I purchased some stocks today. They are in very different business but are cheap and have one thing in common that becomes more and more important going forward - pricing power: BWP - pipeline company. A recent unit offering at 25.3$ trashed the MLP and the units hit their march lows in the 21$ range again. The march decline was caused by news of a 800M$ cost overrun at BWP huge expansion project initially valued at 3.7B$ but which now costs 4.5B$. Initially this project was calculated at 7-7.5x EBITDA/ Capex which now due to cost overruns is closer to 9x EBITDA. Still with this multiple the projects are mildy accreditive and addon projects (assuming there are no more cost overruns) may get the total multiple even lower. Since this dreaded CC in March things have been looking up. 1) No more cost overruns relative to revised plans 2) All FERC approvals granted 3) The GP Loews group acquired 28M units @30$ each a substantial premium to support BWP. Even better those units will receive reduced distributions for 5 years. With the recent capital raise of 250M$(10M units) there are only about 300M$ equity raises left (this year or next) to conclude the financing for the Capex program 4) Insider buys from the Tisch family 5) The pipeline capacity seems to sell out quickly after it becomes online (see the recent announcements) The pipelines itself is FERC regulated meaning that tariffs are indexed to CPI +1.3%. The contracts are LT with about 6-10 years duration on fixed terms, independent of gas prices or volumes. It's a simple fee business. I also noticed that BWP's main backbone pipe as well as the recent East Texas to Mississippi expansion runs right through the Haynesville shale, so there may be opportunities for nice incremental business in a few years. UHR.VX - the Swatch group - the largest watch maker (by revenue in the world). The business in the top end has been humming along well especially in Asia and Arabia. PE based on Y2007 numbers i around 12 and the balance sheet it ironclad.I think the luxury business will hold together in this recession and the brand equity that Swatch owns is impossible to duplicate. I am also looking at a couple of liquor companies. DEO, RI.PA, RCO.PA and luxury company MC.PA I think all those companies have demonstrated pricing power which might be a very valuable asset in the stagflationary climate I am envisioning.

To: Spekulatius who wrote (31375)	7/4/2008 2:42:23 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78740

Limited partnerships. I haven't looked at BWP. I want to say though again that I like what I expect to be the convenience of easy tax filing (USA Federal/state) with KYN. I'll miss some tax advantages maybe, and there's the KYN management fee. To me it seems like a reasonable price to pay to get some diversity/benefits of energy-related lp's: biz.yahoo.com (Before I add more shares, I believe I'll just hold the shares I already have until/unless the stock price drops below nav.)

To: Spekulatius who wrote (31375)	7/22/2008 2:00:34 PM
From: Jurgis Bekepuris	Respond to of 78740

I looked at UNH report today. Tough to say much. It looks bad, but the real question where we go from here. If the company can recover to 2007 earnings, then it is significantly undervalued. But can it? I can't really say. There are too many unknowns IMO (I listed negatives before: negative tangible assets, unknown situation of "long term investments", possible Medicare, Medicaid issues, etc.). I would rather bet on retail or even perhaps financials (AXP, WFC, USB, BAC) than on UNH... At least these are less dependent on government decisions. I still have very tiny position. Definitely not buying and may sell it to switch to something else.