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

To: The Ox who wrote (2156)	8/5/2012 9:57:43 PM
From: Sergio H	Read Replies (2) \| Respond to of 4721

T.O. Thanks for your write-up on JOY. I agree that there's value there based on metrics, but I need to dig a little deeper. On my review, JOY has more compelling metrics than any of its competitors. The metrics part is as far as I've gotten to so far. We need to establish that its not cheap because it should be. On SPLS, there's more there then just metrics. Here's my take on why its a value stock: Message 28274459 On ADM, I would also pass. Message 28307462 And...UPM v CXS or both?

To: The Ox who wrote (2156)	8/5/2012 10:11:57 PM
From: E_K_S	Read Replies (2) \| Respond to of 4721

OX - Good argument on "Net Profit" - It makes me like GLW even more! Regarding JOY, good review. The only negative argument I can make is coal underground equipment sales should fall but will probably be made up in other sectors. I do know that many of the new mines I follow have large capital investments in their equipment which is very efficient. CAT is the go to supplier of the Trucks and dirt hauling equipment. The two year chart shows JOY has under performed. The fiver year chart they are even . . .reversion to the mean for JOY? As long as ADM sells below TBV, it's a go for me. I would elect to toss SPLS. In a sour economy (still on the table) ADM should be seen as a defensive candidate stock similar to VZ (w/ their big dividend). We know their margins are low but in hard times, everybody must eat. Similar to JOY their debt profile is quite low. I would say that my overall metric I look at (w/ our fragile economy) is debt. 4x Annual Net Income s/d be less than Total Long Term Debt is the Buffet measure. ADM has no trouble meeting this metric. Unfortunately (or fortunately) SPLS and JOY both meet this metric too. I still like the idea of buying a business for less than their assets are valued (limited downside) but I am open to other arguments. Good review on Joy. Has me thinking about another add to my already large portfolio. Will put it in my watch list. EKS

To: The Ox who wrote (2156)	8/6/2012 2:19:53 AM
From: bruwin	Respond to of 4721

I'm with you on ADM, TO. Looking at its Annual 2011 Income Statement we see only 5.1% of Revenue left over after deduction of CoS, and 3.2% left at the EBITDA level. In addition, 20% of EBIT is lost due to Debt Expense. It's no wonder that ADM only has 1.4% of its Revenue left over at its Bottom Line. That's $1.2bil. from a top line of $89bil. In addition its Pretax Return on Cap.Employed is down to about 6%, and it's been declining over the last 3 years from 11.3% to 10.4% to 6.2%. When one considers 'Margin of Safety', ADM has very little of that should anything adverse occur in its business.