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

To: Spekulatius who wrote (33534)	2/18/2009 12:40:07 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78748

re UL - good presentation at the CAGNY conference they issued 5 year bonds with 3.65% and 10 year bonds at a 4.8% coupon. Why do I care? it's a sign that UL is creditworthy. I like to compare the earnings yield of a stock to it's bond yield. if the earnings yield is lower than the bond yield, the investor relies on growth to make up for the shortfall relative to the bond owner. Likewise, if the earnings yield of a stock is higher than the bond yield it's a sign that the owner of the stock is well compensated for higher risk. Based on that UL with a 11PE and a 4.5% dividend yield is very undervalued. unilever.com

To: Spekulatius who wrote (33534)	2/18/2009 4:17:27 PM
From: E_K_S	Read Replies (1) \| Respond to of 78748

I started a small position in Spectra Energy Corp. (SE) today. I am a bit concerned about their 32M new share offering. These new shares represent an additional 5% of the total shares outstanding. The company lowered their 2009 earnings to $1.05 down from $1.17. The dividend is still at $1.00/year which I expect will be cut (current earnings barley covers the dividend). I like their distribution business even though they have some exposure to NG prices and Canadian/$US currency exchange rates. This could be a positive if NG moves higher and/or the Canadian $ rallies against the US$. The positive is that they have new pipeline facilities coming online next year that will generate new revenue streams that could ad as much as $0.20/share to their 2010 net income. These estimates by the analysts are probably too high but the positive trend is good. Therefore, I am in for a small starter position now and when/if there is a dividend cut and the stock sells off, I will buy more. ================================================================= I also added to my COP position. The idea is to peel off some XOM shares and buy COP shares so I balance the portfolio with equal amounts of COP and XOM. I like the NG assets of COP at the current price. I have been peeling off XOM shares at prices above $80. I have my GTC orders in for two drug stocks GlaxoSmithKline plc (GSK) and Johnson & Johnson (JNJ). No urgency to buy now, but will add to my current shares on any sell off. My strategy is to add dividend paying companies that are either defensive in nature and/or own a lot of natural resources (provides a long term inflation hedge). The market has been acting like it wants to trade a lot lower with many more sellers than buyers. I would not be surprised to see another 20%-30% fall on the DOW in the next 6-8 months. I plan to deploy more cash as opportunities present themselves. EKS