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

To: Jurgis Bekepuris who wrote (32786)	11/16/2008 12:25:04 PM
From: E_K_S	Respond to of 78659

Hi Jurgis - Cramer provided an overview on ETN Friday and he liked the stock for their steady dividend (w/ potential for future increases), moderate debt and completed new secondary offering (completed a secondary stock offering 4/2008 17.5 million at $84/share) and thought many of their business segments would weather an economic downturn. The company makes power generation more efficient and would benefit from an infrastructure build out. Insiders still seem to be selling stock, so I am not convinced that the lows are in place. Overall, I like their different business operations, the fact that they were able to complete a secondary offering at more than double the current price and at a 4% yield, the dividend is historically at the high end. I may look to start a small position if the dividend yield goes above 5%. The company would complement my other infrastructure holdings that include HON and GE. My portfolio does need more exposure to some of the business operations ETN provides. UTX, GE and ETN are somewhat similar companies. finance.yahoo.com GE is the most oversold due to their financial unit problems, ETN hs tracked the S&P 500 sell off and UTX is still about 20% above the equivalent S&P 500 sell off. finance.yahoo.com^gspc;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined EKS

To: Jurgis Bekepuris who wrote (32786)	11/16/2008 5:20:49 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78659

I started buying ETN in July as mentioned here: Message 24829438 Whether it's a buy now (or then) depends on how one looks at things. I say it's a decent reversion-to-mean play. One could assume though that nothing - or this one specifically -won't ever revert - depression time is nigh. Looking at the past ten years, company has been profitable each year. The low annual p/e over the past ten years was 7 in 1999. It's about 6 now. About this comment: "I took a look at it and there's not much to like.ROE has gone up in recent years, but ROIC is still below 15%. Net margins below 10%. Debt/equity about 50%." In past my intent has been to use a variety of analytical methods to try to find candidates to include in my portfolios. Which is a different mindset perhaps from others who keep concentrated portfolios and so for safety and position size would emphasize reasons for excluding stocks. Since the market has now changed and there are so many, many stocks selling at value prices or at prices not seen in a decade, there's no reason for anyone who spots something negative they don't like about a company to not just move-on. There are so many other possible candidates. So if someone doesn't like 15% ROIC or wants better margins than 10%, it makes sense to move on to where the better numbers could be found - in this market such candidates very possibly will exist. For about every stock I describe I am buying on this thread, I have put each through one or more analytical tools that I use. These tools are all contextual in nature. So I am interested in seeing how roe now compares to roe in past years and at past stock prices and book value. (I use roe rather than roic). This method goes further than the Greenblatt methodology. His idea of course is to buy a package of stocks at the upper right quadrant where high roic meets high earnings yield (i.e. low p/e). My idea is based on the presumption that at some stock price, all companies will be a value buy if they are making profits, regardless of how low their roe (roic) might be. An example might be net-nets of profitable companies. Or something like ULTR with not-so-great roe, but very low p/e. Anyway, ETN fits my roe model. I'll keep adding if stock will drop to new lows on no adverse news (and if I haven't run out of money or confidence -g-)