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

To: Graham Osborn who wrote (55785)	7/31/2015 1:30:57 PM
From: E_K_S	Read Replies (2) \| Respond to of 78717

TAL selling at/below BV and it's GN shows it's 45% undervalued now. Still investors are selling because they believe their container lease revenues will be less especially as contract leases renew. It does not matter what the value of those assets are, but what FCF they can generate from those assets. Therefore, one does need to be careful of looking at just BV and/or the GN valuation. Revenues and the prospects of maintaining those revenues are really the driver. Even w/ a company like CBI where they maintain a book of business w/ new contracts that may stretch out years is all good until the economy sours and/or one or more of those contracts get cancelled. What seems like a sure deal can be a value trap. My one best predictor is to see those GN and GV amounts that show the company is undervalued but to also watch trading volume and sector. If trading vol is low and sector is out of favor, and after weeks/months of sideways trading, then that may signal a good 'value' entry point. It's better to be a little late to the party than way too early. I was looking at the 10 year chart for TAL & TGH and these shipping stocks could still move 50% lower (similar to how they traded in 2009). They are more sensitive to economic cycles and typically will sell off faster and longer if/when cycle is sour. I have lowered my next value buys in these companies 35% lower from the current prices for this reason. CNP got close to it's GN valuation earlier this week. Their revenues are safer than several of the other companies I follow since 50% of those revenues are from their utility division. So now I not only look at GN & BV, I look at the quality of the future revenues more closely. EKS