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

To: Paul Senior who wrote (38401)	6/30/2010 7:43:16 PM
From: E_K_S	Read Replies (1) \| Respond to of 78476

Paul - I should probably hedge my bet on SVU and start a position in WMT. I do own Tesco which is sort of like a WllMart in size however I never considered WMT a value stock. Their forward PE at current prices is now below 11 and the dividend yield at 2.4% is equivalent to that of SVU. Maybe WMT is entering value territory too. Since this was the last trading day of the quarter and for June, perhaps the last hour of selling was due to funds selling their looser positions. The summer rally should start soon. There does not seem to be any place to hide. The food stores seemed like a logical defensive play but it has not worked this month. EKS

To: Paul Senior who wrote (38401)	6/30/2010 9:05:13 PM
From: Wallace Rivers	Read Replies (1) \| Respond to of 78476

Bought more LM today toward day's end.

To: Paul Senior who wrote (38401)	7/1/2010 3:04:02 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78476

re SVU - I am really wondering how "defensive" the grocery business is. The business model for the grocery store is to draw traffic with promotions and make the money with std priced fare and incidentals. But nothing prevents customers from just buying promotions, except some convenience. There are new entrants like Trader Joe, Wal Mart and Target that know how to keep prices low. There is Costco and Foodmax as well offering lower prices. As for valuations, i agree that grocers like SVU, SWY, KR are cheap with a 5x EV/EBITDA but for around 6x EV/EBITDA I can buy a drug store stocks WAG and CVS. BBY is discretionary but it's a category leader trading at 4x EV/EBITDA. So while the grocers are cheap, it's a bit relative. I think the drug stores CVS and WAG and in particular electronic retailer BBY are better buys. For many, buying a new cellphone every 6 month does not seem a discretionary expense any more...