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

To: Paul Senior who wrote (45913)	12/12/2011 5:05:41 PM
From: E_K_S	Read Replies (1) \| Respond to of 78476

UGI Corporation Common Stock (NYSE: UGI ) Bought back half of the UGI shares I sold (1/5/2011 @ $31.77). These are in the IRA where the dividend is important. I expect their sales to eventually increase from their $150M investments in the Marcellus Shale area (upgrade and expansion of their gathering system & a new pipe line extension). Hopefully their investment will provide them an abundant supply of NG to re sell through their other distribution channels. Also in October they acquired Energy Transfer Partners’ propane distribution businesses. When integrated w/ their AmeriGas subsidiary (to be completed by 3/2012) their 2012 sales numbers should be higher. Therefore, they have completed some beneficial transactions in 2011 that should help them grow their revenues. Analysts estimate $2.63/share for 2013. At a 14 PE (this seems to be where their peers are) it may not be too unreasonable to expect $36.00/share. One could make an argument that the stock is 28% undervalued from its current price of $27.80/share. It seemed like I sold my shares a lot longer than just a year ago. I am now able to re enter the position at a 19% lower price. Like you pointed out they have been steadily increasing their BV over the past ten years which is something I like to see. FWIW, I have been adding to my MHRpC between $24.50 - $24.75 as a place to park cash. The thought was on down days to peel off some of these shares as a source of funds but only sell them above par (par=$25.00). It worked today even though the preferred goes ex dividend on the 15th. Was able to capture the UGI dividend ($0.26/share) which goes ex dividend tomorrow. I have been adding to my GSTpA position too below $19.50/share. I plan to use this as a source of funds like MHRpC but they also provide a way to play a possible buy out of the common as these would move quickly to PAR . I still own a bit of TPZ (it even trades at a discount to its NAV) that I use as a source of funds but unless you buy it low enough (say under $21.00/share), it's hard to sell at a gain. In total, these three holdings (MHRpC, GSTpA, TPZ) make up 12% of the portfolio that I see as "cash" and/or a source of funds. That could pose a risky bet for the portfolio. EKS