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

To: Sergio H who wrote (1956)	7/18/2012 10:45:00 AM
From: E_K_S	Read Replies (1) \| Respond to of 4719

Hi Sergio - That was one of the reasons I selected VZ as their exposure is in the U.S.. You miss that European growth but also avoid that potential debt land mine field. My other selection, GLW I consider to be a manufacturer (not really in the high tech sector) but with a really good R&D division. They have several products that feed into the "digital" media explosion theme but also have 45% exposure to other emerging sectors (health care & environmental). CSCO and other hardware developers were also one sector that could benefit from the growth of all this digital data. My concern is the bits of data could become a commodity like storage bits and the potential margins could/would shrink if no value added service is provided by the provider and/or intermediary. CSCO is in value range but management has been too generous w/ their stock options diluting the long term ROE returns. I was surprised to see that their BV has increased every year over the past five years. TBV is $6.01/share and BV is $9.59/share. This may be a possible candidate stock to play into the "digital media" theme if one could buy close to BV. Currently the stock sells at 1.7x book. The other possible play that Buffet likes are deep discounted debt obligations. You can buy the Lucent Technologies Capital Trust I, 7.75% Cumul Conv Preferred Securities for $0.61 on the dollar and receive an effective 12% return. These are supposed to be paid off 3/15/2017 (or in about five years). That's a 21% annualized return IF they are paid off in 2017 and ALU Alcatel-Lucent ADS remains solvent (and has no BK). A few of these preferred bonds could be a possible candidate selection based on their discounted tangible value. I still think from a risk/reward view, VZ and/or T are safe candidate stocks. I am sure there are others so lets toss around some other names we might have missed. EKS

To: Sergio H who wrote (1956)	9/13/2012 10:31:27 AM
From: E_K_S	Read Replies (1) \| Respond to of 4719

Re: Verizon Communications Inc. (NYSE: VZ) AT&T, Inc. (NYSE: T) Interesting to see activity in both these names as they are the beneficiaries of the new service contracts from all of those new IPhone sales. Even w/ subsidized phones, the new monthly service revenues eventually make it to the bottom line in higher profits. There are some lingering pension liabilities for both T & VZ but apparently these liabilities are not on the radar screen of new investors. Too bad VZ wan not in our selected SI candidate stocks but I do own both in my own portfolio. For me the catalyst is the new 4G lite wireless networks that leapfrogs the old GSM systems in speed and quality. Just looking at my friends monthly VZ and/or T bills, the incremental cash flows are huge. EKS