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

To: Spekulatius who wrote (45594)	11/19/2011 5:03:27 PM
From: E_K_S	Read Replies (2) \| Respond to of 78673

Hi Clownbuck - AG & large Earth Mover tire market Checking out the MGDDY Website, I notice they manufacture both AG and the very large earth mover tires too. This is the segment of the market I really like but wanted a pure play. The PE for me is in Value territory but is this the best way to play the very large tire market? The large miners require specialty tires and it can be as long as 8-12 months for orders to be delivered. Thought I might add a specialty AG tire manufacture to my AG basket too. Can you think of any other companies that might be a better pure play? Several years ago I bought Goodyear Tire & Rubber Co. (GT) as a value buy. That worked out for me (more than a two bagger) but never bought back in. EKS

To: Spekulatius who wrote (45594)	11/21/2011 2:14:23 PM
From: E_K_S	Read Replies (1) \| Respond to of 78673

Compagnie Generale DES Etablissements Michelin SCA (MGDDY.PK) Followed you in for a tracking position in Michelin tires. I am looking to their specialty large truck and Ag tires (representing 20% of sales) as my main area of interest. They are also a good value buy at current levels. Sales into China will also be a plus. I see that a dividend is paid every May which could be as high as 4%. I will look to a $14.00/share - $15.00/share as an exit target. EKS

To: Spekulatius who wrote (45594)	11/29/2011 3:44:39 PM
From: E_K_S	Read Replies (1) \| Respond to of 78673

Goodyear Tire & Rubber Company (NYSE: GT ) 2:02PM Goodyear Tire announced that it has been selected by Con-way Truckload as its principal supplier of wide-base truck tires (GT) 12.77 -0.13 : Con-way Truckload Selects Goodyear as Tire Supplier Company to Use New Wide-Base Tires with DuraSeal Technology finance.yahoo.com From the article:"...The Goodyear Tire & Rubber Company (NYSE: GT - News) announced today that it has been selected by Con-way Truckload, the North American full-truckload transportation subsidiary of Con-way Inc., as its principal supplier of wide-base truck tires...." =============================================== I wonder if Compagnie Generale DES Etablissements Michelin SCA (MGDDY.PK) has been contacted and/or have solicited large contract buyers like Con-Way. What is encouraging is it appears that that several of these large shippers are shopping their large "service agreement" orders around. I wonder if Michelin will announce some soon? EKS

To: Spekulatius who wrote (45594)	1/15/2012 10:47:10 AM
From: E_K_S	1 Recommendation Read Replies (2) \| Respond to of 78673

A well written article that reviews COMPAGNIE GENERALE D (MGDDY.PK) - (Michelin Tire) value proposition and their market advantage. *Note: For US investors there's an OTC ADR. Five ADRs represent one common share.* Therefore, MGDDY.PK at $12.00/share is equivalent to $60.00/share of the European traded common. The article lists values in terms of the European common share amount (ie $60.00/share). The Case For Michelin Dec. 31, 2011 gurufocus.com A few items in the article that caught my eye: o At Michelin, roughly 50% of revenue comes from trucks, earthmovers and planes. o The US Navy just exercised a second five-year option to extend its tyre supply contract with Michelin. Under the contract, Michelin is required to deliver 100% of all Navy aircraft tyres anywhere on the continental United States within 48 hours or less, and anywhere in the world, including deployed aircraft carriers, in 96 hours or less. Michelin is currently exceeding the Navy’s delivery requirements, averaging over 98 percent on-time delivery with zero backorders. The Navy no longer manages its own inventory like it used to. Michelin has a similar contract with the Defense Logistics Agency, to supply aircraft tyres to the US Air force, the US Army, and some allied foreign militaries. o On average, Bridgestone generates about $ 2B of EBIT, Michelin generates $ 2.5B and Goodyear $ 0.8B. The market cap of Michelin is roughly $ 10B, that's 4x EBIT. Goodyear trades at 4.5x and Bridgestone at 9x for a market cap of $ 18B. o Michelin is spending $2B per annum for 4 years to increase production volume 25%. This implies current production capacity is worth $8B x 4 = $32B. With zero value assigned to the distribution business, we get a per share value of EUR 70 => $90 -------------------------------------------------------------------------------------------------- It looks like if one holds through this cycle, in four years Michelin should have built out their production by at least 25% from current levels, still maintain their exclusive tire fulfillment contract w/ the U.S. Navy (year four of five years), and the company continues to simply generates more cash per tyre sold than its close comps. The article makes the case that the stock is undervalued by as much as 40%-50% from it's current levels. MGDDY.PK fair value (according to the article is between $16.50 - $18.00 per share). Seems like the value proposition will need some time to play out. EKS P.S. When converting for the 5:1 ADR shares to Common, the GN in terms of the ADR price s/b $11.15/share.