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

To: Sergio H who wrote (2101)	7/31/2012 7:15:48 PM
From: E_K_S	Read Replies (1) \| Respond to of 4719

Devon Energy Corporation (DVN) - Here is a report that McDep did on DNV in April 2012. The stock was selling at $70.00/share and at that time had a McDep ratio of 0.74. (Their Fair value was $102/share) That would make the current McDep ratio around 0.58 since the stock is now selling at $59.00/share goo.gl Their write up is pretty good and it has the "pure" domestic shale exposure I am looking for. The slight negative might be they have too much NG. They have 48% Oil and 52% NG. The positive is NG is closer to it's lows and you would be buying those assets on the cheap. Long term, NG could be a reversion to the mean play and may increase in value faster than oil increases in price. The flip side is there is a glut of NG and prices in general will stay firm at current levels because of the abundance of supply. The company pays a 1.4% dividend which is between Apache and MRO.. --------------------------------------------------------------------------------------------------------------------- There is some discounted junk bond paper that might be of interest and help maintain a double digit return to the SI portfolio. Today I bought some of the SVU 8% par @ $1000 5/2016 maturity Notes discounted to $863.30 per $1000 bond (that's a 14% discount to par) with a yield to maturity of 13%. SVU eliminated their common share dividend and are using the proceeds to pay down these notes. The notes are also secured by their extensive real estate holdings. I expect to hold these bonds to maturity. The Fed may announce in tomorrow's meeting that they will extend their low interest rate policy out to 2015, these bonds begin to look quite attractive. I bought enough of this paper to cover my new income property taxes (at least for four years until they are paid off) and as a bonus I am buying them for $0.86 on the $1.00. To me, the risk/reward is good especially when held to maturity. For a more detailed review see my write-up on the SI Value thread. EKS