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

To: Sergio H who wrote (2157)	8/5/2012 10:24:53 PM
From: The Ox	Respond to of 4721

I don't see barrier to entry, if someone with deep pockets decided to come along and compete in the marketplace or a competitor like OMX can find a way to become more profitable and keep end user prices down. SPLS 5 year average growth rate for revenues is 6.6% and for EPS its 1.2%. So with a PE of 9, it seems reasonably priced and not all that great a value to me. According to current estimates, revenue growth this year will only be 1% and less than that next year. EPS growth of 9% yoy is in line with their PE. I see that OMX has $81/share in revenue vs SPLS that has $35/sh. I'll be honest that I don't know enough about the industry, so I have to assume that there are reasons why OMX has a return on assets of 1 vs. SPLS returning 7. I guess I don't see why SPLS is such a bargain to deserve entry into the portfolio but I am will to read what others have to say....

To: Sergio H who wrote (2157)	8/6/2012 3:11:41 PM
From: The Ox	1 Recommendation Read Replies (1) \| Respond to of 4721

I still lean towards UNP vs. CSX. I think that CSX is a good value but the long term history shows that UNP is slightly better managed. Over the next 5 years, if history is our guide, then I believe the subtle but clear difference between the 2 will give the advantage to UNP. With one caveat, UNP is up about 30% more than CSX over the past year. Some of the "value" is already priced into the stock. As I said before, I think the portfolio will do fine with either. I'm not sure we should include both, as that would be a heavy weighting in the one industry and I would prefer the portfolio show more diversification.