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

To: JakeStraw who wrote (44380)	9/16/2011 10:38:14 AM
From: E_K_S	1 Recommendation Respond to of 78744

Hi JakeStraw - Here are the stocks discussed in the article. finance.yahoo.com If I had to choose one, ROST looks interesting. I know Madharry shops their for his bargain shorts (as do I). I find that they have very good discounts through out the year. In fact, I have fitted many a bathroom with new bath towels and other related bathroom supplies from Ross shelves. My one concern with the results from their screen is the PE's all seem high when compared to the current S&P PE average. I did not check forward PE's which could be lower. I do not pay too much attention to forward PE's from analysts at this point in the cycle because I feel they have not factored a slowing economy and/or double dip. I have tightened up my value criteria and want companies with PE's around 10, a dividend near 4% and their LT debt when compared to annual net income to be no more than 4x. I will probably miss a lot of potential Graham/Buffet value Buys but I want to error on conserving my capital rather than missing the possible value buy. EKS

To: JakeStraw who wrote (44380)	9/16/2011 11:33:06 AM
From: Paul Senior	Respond to of 78744

re: JBHT and criterion "2) Net profit margin more than 15%" Checking my suspicions about the level of profit margins for transportation haulers, I find JBHT doesn't have, and in past decade never has had, net profit margins greater than 15%. (More likely to be in the 5-6% area for JBHT) ============ Fwiw, among clothing stocks which I hold, I have a few shares of Coach, COH.

To: JakeStraw who wrote (44380)	1/21/2013 12:08:51 PM
From: E_K_S	Respond to of 78744

Hi Jack - You posted a Buffet & Graham article listing Six value ideas dated 9/16/2011. The price of JBHT was $35.80/share on 9/19/2011. Based on Friday's closing of $65.08/share the stock is up 82%. YOY EPS (2011vs 2012) +22% w/ Revenues +11.43%. The analysts missed on their EPS estimate (30% too high) but hit their Revenue estimate. The stock price has had a pretty good run too reaching an all time high Friday. The stock to me appears over valued but looking at this one last year I would have concluded the same thing. What did we miss? Perhaps it is explained by their efficient use of capital as measured by their ROCI. J.B. Hunt Transport Services ( JBHT) provides diversified trucking and logistics services. The company carries truck-load freight throughout the U.S. and into portions of Canada and Mexico. JBHT also provides transportation, storage and planning to companies such as Wal-Mart, under long-term contracts. Hunt’s intermodal segment offers the trucking of freight in shipping containers from port to rail to customer location. “Shore to door” reduces handling and long-distance trucking. Management is focused on aggressively increasing its long-term contract business and intermodal operations, which are considerably more profitable. We expect revenues to rise 12% and EPS to increase 29% during the next 12 months. JBHT was mentioned today on a radio show today which caught my attention. Stock has grown 25% each year over the last 10 years. EPS psoitive for the last 15 years. The biggest value metric that pops out to me is their low amount of LT debt when compared to their annual Net Income. For 2012 they had $645M LT Debt that generate $299M Net Inomce or about 2.16X LT Debt/ Annual Net Income. This translated to over 20% ROCI (Return On Capital Invested) over the last four years. I assume this is the same as ROCE (Return On Capital Employed). I really have not focused on this measure. For JBHT, they have a high ROCI since their LT debt is small. A company having less assets but same profit as its competitors will have higher value of return on capital employed and thus higher profitability. So, their long term results of their operations show that the company have been very efficient in the utilization of their assets. Therefore, a consistently high ROCI is a good thing and a metric I need to pay more attention to. A low LT Dept/ Net Income ratio should result in a higher than industry ROCI if management can achieve this over time. As a footnote, BV really has not grown that much over the period which may be industry specific to JBHT as old trucks get replaced w/ new ones and total assets stay constant w/ common shares outstanding. Maybe this is indicative of a company that has a high ROCI. EKS