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

To: Mattyice who wrote (54869)	1/21/2015 1:40:56 PM
From: Mattyice	Respond to of 78777

but then again comparing wfc to a fiat spin off... as the young kids say LMAO

To: Mattyice who wrote (54869)	5/8/2015 6:31:11 PM
From: E_K_S	1 Recommendation Recommended By Mattyice Read Replies (2) \| Respond to of 78777

AGCO Corporation (NYSE: AGCO) - peeled off 35% of shares for 19% gain Trinity Industries Inc. (NYSE: TRN) - closed out position for 8% gain Ampco-Pittsburgh Corp. (NYSE: AP) - started new position Merge Healthcare Incorporated (NASDAQ: MRGE) - up position by 35% as the value proposition is compelling I decided to book some profits on recent gainers, add to MRGE my small cap health care software company and start a new position in a small cap steel play. -------------------------------------------------------- AGCO got to it's Graham Value No. of $50.41/share today, so I decided to take 35% off the table and book my gain. Stock is still slightly undervalued on other measures like PE at 11.6, net income to total debt at only 2.7x, or even only 1.3x book. The company did show a slower increase in sales which may reflect the difficult slow growth European markets. ARCO still has the kicker with Tafe Motors and Tractors Ltd (TAFE) as a large shareholder. According to Reserve Bank of India (RBI’s) data (outward FDI from India for October), Tafe Motors and Tractors Ltd andTractors and Farm Equipment Ltd have invested $28.93 million and $110.41 million, respectively, in AGCO Corporation. For that reason I continue to hold 65% of my original shares. TRN is still undervalued but based on some of the recent postings here and other skeptics in the market, this one could re-test it's lows (just based on psychology) so I plan to start a new position at/below $29.00/share. Pretty much all of the same valuations remain intact. ------------------------------------------------------- Ampco-Pittsburgh Corp. (NYSE: AP) was a company discussed recently on the Motely Fool Pod cast. Business: Manufacturer of forged hardened steel rolls used in cold rolling by global producers of steel, aluminum & other metals. I started a small position at $16.38/share with a price target of $23.10/share. Investment Thesis: Ampco-Pittsburgh’s share price declined by 20% in the year to close at a new 52-week low of $15.97 on May 1, 2015, largely due to a FY2014 net loss resulting from an one-time charge related to asbestos litigation. AP is currently trading at 2 times net cash (in other words, net cash accounts for half of market capitalization) and boasts a trailing twelve months dividend yield of 4.5% (assuming quarterly dividend of 18 cents is maintained). AP is in a net cash position, with a low gross debt-to-equity ratio of 0.06. A more profitable, less capital intensive Air & Liquids Systems business (e.g. heat exchange coils, centrifugal pumps) is hidden within its larger (revenue, not profit) and more prominent Steel Production business. Mario Gabelli/Gamco Investors is a shareholder in AP. Risk factors: Risk of future asbestos-related litigation; Decline in steel demand; Top line has been steady, albeit slowly declining in the past few years --------------------------------------------------------------- I continue to add to MRGE a company that provides software products services in the health care sector. I am buying this because of their recent merger that should allow them to increase their revenues (by cross selling their software and services into their combined customer base) and build their different product platforms into a formidable health care software company like CERN, MRDX and/or ATHN . I am buying MRGE at 2.5x sales, w/ little to no debt and YoY organic revenue growth of 7%. The other larger competitors are selling north of 7x sales. My buy today at $4.68/share was motivated by MRDX results that showed a miss in their Q1 EPS but YoY growth of 6%. For that, they jumped 6.5% today. I believe MRGE will eventually get recognized (once they complete their merger synergies/consolidation). Analysts are having a difficult time figuring out their organic growth but some estimates have that as 7%. I think as a combined company it could be more especially how they price their products services (one revenue stream from software licenses and another from unit services that are easily billed back to Medicare). My conservative valuation is $7.50/share but could be as high at $14.00/share if/when the market prices them at 7x sales. The value opportunity in MRGE is compelling when one looks at the amount of money spent in this sector (ie health care) and their product and services reduces the cost of delivering this care through new technology. You can buy this one at a 40% discount to it's peers and you may even get a growth kicker. My overall position is still quite small w/ three different buys and only a 0.8% portfolio position. My average cost is now $4.60/share. EKS