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

To: Paul Senior who wrote (43679)	8/2/2011 1:46:42 PM
From: E_K_S	Respond to of 78523

Friedman Industries Inc. (FRD) I am adding this one to my watch list. They have no debt, pay a 4.4% dividend and have a forward PE of 8.04. Those sounds like pretty attractive value numbers. ROE at 14% is ok too. They have a small division that builds tubular well pipe from their flat rolled steel product. Stock is near it's highs so, I have it on my watch list and on a 10% correction, this one might be an attractive value buy. The company produces ERW (Electric Resistance Welded) STEEL PIPE - Steel pipe for use in the water well industry, steel building columns, steel pipe piling, water and air lines, metal fabrication, fencing, road bore, culverts, sign posts and other structural applications. Steel used for the farm or ranch (well & irrigation pipe, fencing, culverts) also fits my AG theme. I will do a bit more research on more local producers as well pipe demand is specific to the shale region (FRD is located in Texas) and the closer the manufacturer the lower the transportation costs. I am not too interested in any of the foreign suppliers at this time. I sold my GGB in March 2011 around $13.40/share and noticed that it has fallen back down to $8.85/share. My previous buy was 3/2009 @ $5.37/share. This one is attractive to me as they supply steel for use in Brazil and the development of their infrastructure and offshore oil fields. I may begin to nibble at another starter position on any sell off down to $6.50/share. The important consideration for me on this cycle is to look at those niche suppliers/producers that have little or no debt. I want them to cater to a growing local market but are a small enough player where such a niche market is large enough for the company to grow. FRD fits this mold (it may be too small). GGB is a bit too large a company unless you can get it a a significant discount. They also carry a bit more debt than I would like. EKS

To: Paul Senior who wrote (43679)	8/3/2011 3:31:34 PM
From: E_K_S	Respond to of 78523

Re: Vallourec SA (VLOWY.PK) You are right regarding Vallourec. They have a division in Ohio that is building a new manufacturing facility (by as much as $250M) to supply pipe to the Marcellus Shale pipeline companies. Their financials do not look too bad (I was worried about their debt level) but it is not the pure play I was looking for. ( finance.yahoo.com ). Ohio Manufacturer Investing More Than a Half Billion Dollars on New Plant to Produce Marcellus Shale Pipelines marcellusdrilling.com From the article:"...One of the companies manufacturing pipelines for the Marcellus is V&M Star, based in Youngstown, Ohio. V&M Star, a subsidiary of France-based Vallourec & Mannesmann Tubes, is in the midst of a major expansion, building a new plant which will allow it to manufacture more pipelines for the Marcellus Shale...". VALLOUREC & MANNESMANN TUBES a Vallourec Group Company vmstar.com Welcome to V & M STAR, North America's leading producer of seamless Oil Country Tubular Goods (OCTG), Line & Standard Pipe, Coupling Stock and Mechanical Tube. --------------------------------------------------------------------------------------------------------------------------------------------------------- The shares available through the pink sheets is their ADR (Vallourec SA VLOWY). Five of the VLOWY ADR equals 1 ordinary share. They pay an annual dividend every August. For 2011 it is $0.2899/ADR share or about 1.5% yield. Their Ohio division is small compared to the total size of the company. My guess is that facility represents only 5% of their total sales. It's hard to evaluate the company's financials as it is foreign (a French company). Don't have any idea of their PE but they did report disappointing earnings last Thursday due to higher raw material costs. Stock dropped over 15% on that news. I continue to look for a "pure" play but this was a good first lead. EKS