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

To: Paul Senior who wrote (45889)	12/8/2011 6:08:29 PM
From: E_K_S	Read Replies (1) \| Respond to of 78476

Position Buying - When to Average Up vs When to Average Down My plan for AGL is to build a core position. It's my 2nd largest NG utility holding at this point, MDU is my first. My last Buy on AGL was 12/07/2010 @ $35.40 right after the announcement of the NI merger. I had other buys in 5/2009 at $28.54/share. So now you continue to add to AGL at $40.00/share which I see is at the higher end of valuation (at least from my take). The Forward PE of 12 and a 4.4% dividend are still attractive as a value buy. I see $45/share as fair value and at the top of the fair value range. So today's buy is perhaps at a 12.5% discount to the fair value range. How do you determine then to average up? Do you begin to peel off shares when the PE approaches 15 (that is what I figure the peers sell for) and/or the dividend yield falls below 4%? When I follow your Buys and sells you do a very good job of buying at or near lows. I just have a hard time averaging up my buys but I guess this is a good thing in the long run as it means the stock is moving higher. In the case of MDU, I have been acquiring shares in the $17-$19 range and selling my higher cost shares at the $22.00 level. As long as the company stays in this range, I am able to build a core position and even average down my cost. Eventually, I see MDU breaking out (similar to AGL). I see both companies building value but I have a hard time building a large core position especially as the stock moves higher in price. I guess the best strategy is to buy enough lots staggered at different price levels (say every 10% price level as long as it remains in the "value" range). On market surges, sell and/or hold highest priced lots and on significant down days add shares. On any negative significant company events, sell and move on. Is this the way you set it especially if your goal is to turn the portfolio every 36 months? InPlay: AGL Resources and Nicor (GAS) received approval of their merger from the Illinois Commerce Commission; this is the final approval required to close the transaction EKS

To: Paul Senior who wrote (45889)	12/9/2011 5:01:10 PM
From: E_K_S	Read Replies (1) \| Respond to of 78476

AGL Resources Inc. (AGL) Picked up some AGL on the close to add to my other shares (I will avg up from my previous buys). AGL was trading a bit funny the last two secession since it is going to be added to the S&P 500. Their Forward PE is still quite attractive at 12.7 when compared to their peers at 15. --------------------------------------------------------------------------------------------- UGI Corp. (UGI) Was also looking at UGI as it was getting close to my earlier sales price @ $27.30/share (7/14/2010). This was one I wanted to get back into as their Forward PE is now close to 10. The article below discusses UGI's uncertain growth prospects when looking at their margins: Gross, Operating & Net when compared to competitors. The bottom line is UGI is not that efficient. Here's How UGI May Be Failing You fool.com This can be seen as a net positive for the company if management can make the appropriate future capital investments to expand their current margins. They just may be in the middle of accomplishing this through recent 2011 investments that should BOTH expand production and open up new (foreign) distribution channels.. From their 2011 annual report Letter to Shareholders: ( 2011 Annual Report: files.shareholder.com ) • In 2011, our Midstream and Marketing team announced a series of investments in the Marcellus Shale region. These investments included the upgrade and expansion of a gathering system in northeast Pennsylvania that will deliver Marcellus gas to the Tennessee pipeline and a new $150 million pipeline project that will extend that existing system 30 miles south to connect with the Transco pipeline. We also conducted the first request for proposal for our 15 BCF gas storage facility in central Pennsylvania, which resulted in 100% of that capacity being committed at attractive rates. We made great progress during 2011 turning our Marcellus aspirations into a reality. • We announced and closed the acquisition of Shell’s propane operations in eight European countries covering the Benelux and Nordic regions as well as the United Kingdom. This acquisition provides us with strong positions in several new markets adjacent to our existing operations, and strengthens our European business through the addition of a talented team from Shell. With this most recent acquisition, our European propane business now operates in 16 countries, delivering more than 700 million gallons of propane annually. • In October, we announced our intention to acquire Energy Transfer Partners’ propane distribution businesses, Heritage Operating, L.P. and Titan Energy Partners, L.P. This transaction represents an exceptional opportunity to expand the reach and scope of our U.S. propane operations, and to bring the high caliber teams from Heritage and Titan together with the AmeriGas team. We expect that this acquisition will close by March 31, 2012. ------------------------------------------------------------------------------------------------------------ Therefore, UGI is now back on my add list on any price below $28.00/share. The company looks like they are in a position to take cheap Marcellus Shale NG and get it into new distribution channels expanding their overall capacity. Let's just hope they can also expand their net margins in the process. EKS