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January 2009

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3

Thoughts on MLPs

January 29, 2009 – Comments (2) | RELATED TICKERS: CMLP , LGCY , EPE.DL

I own a number of MLPs and am generally positive on the sector. Quicksilver Gas Services (KGS) and Legacy Partners (LGCY) are smaller companies that have risen over 40% YTD; KGS is a midstream MLP and LGCY is an E&P (actually mainly P, since it mainly buys older fields). I do not consider either of them to have an economic moat, although I believe that KGS has significant growth potential and LGCY pays a very nice distribution. KGS actually hiked its distribution by 3% while LGCY is maintaining theirs. LGCY and KWK, which is KGS' parent, have significant hedging in place.   [more]

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VMWare is dead, which affects EMC somewhat

January 28, 2009 – Comments (5) | RELATED TICKERS: VMW , EMC

OK, I am exaggerating somewhat. VMWare is still very much alive. However, the economic crisis came at precisely the wrong moment for the company. Had it been in its present position in 2004, it would have taken off, captured significant market share and built a lasting advantage over competitors. However, companies are scaling back their tech spending on all fronts.  [more]

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Thoughts on Pfieth

January 26, 2009 – Comments (2) | RELATED TICKERS: PFE , WYE.DL

The Fairholme Fund, one of my largest holdings, made Pfizer their largest single holding recently based on expectations that it would deploy its cash hoard in acquisitions. Well, Pfizer just entered a deal to buy Wyeth. Pfizer essentially bought a pipeline - Wyeth derives about a third of its revenue from biologics, which is probably going to be a hot growth area.   [more]

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US Bancorp: buying opportunity but dividend not safe

January 21, 2009 – Comments (1) | RELATED TICKERS: USB

At $13 and change, US Bancorp is an attractive stock. I've owned and sold the stock before. While their Q4 earnings were disappointing, they were to be expected. Their strong deposit and loan growth shows that clients consider them a safe haven.  [more]

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2

Bank of America may need more than $80 billion of new capital

January 20, 2009 – Comments (0) | RELATED TICKERS: BAC , WFC , USB

A Marketwatch article quotes a Friedman, Billings, Ramsey analyst who believes that BoA may need as much as $80 billion of new capital.  [more]

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The problem for stocks is bonds

January 19, 2009 – Comments (0)

A NY Times article reports that the cost of borrowing has risen drastically for many corporations, especially those without investment-grade (BBB or higher) credit  [more]

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2

Bank of America to get more capital

January 15, 2009 – Comments (3) | RELATED TICKERS: BAC

The NY Times reports that BoA is asking for more money from the Treasury. Ken Lewis told regulators that Merrill had taken substantial losses, potentially putting the combined entity in jeopardy.

Ken, you should have waited.

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2

Thoughts on Apple

January 14, 2009 – Comments (1) | RELATED TICKERS: AAPL

The NY Times reports that Steve Jobs is taking a leave of absence, as his health issues are "more complex" than originally thought.  [more]

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5

Thoughts on Bank of America: Thanks for vaporizing my capital

January 13, 2009 – Comments (5) | RELATED TICKERS: BAC

In an analyst note released yesterday, Jaime Peters of Morningstar said she felt the situation at BAC was deteriorating. BAC received less government funding than others and probably used a good chunk of it to absorb losses.  [more]

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Thoughts on Fastenal

January 11, 2009 – Comments (0) | RELATED TICKERS: FAST

Fastenal used to be one of my largest positions. The company had been performing exceptionally well, maintaining revenue growth even through the recession. I'd trimmed my position by 40% when the shares were around $50. Now, the shares are $33, having been absolutely hammered over the last few months in the general absence of recent news.  [more]

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Thoughts on Enterprise GP and Enterprise Products

January 08, 2009 – Comments (2) | RELATED TICKERS: EPD , EPE.DL

Enterprise Products Partners (EPD) increased its cash distribution rate today to $0.53 per unit - 6% above the $0.50 per unit this quarter last year. That's not a lot in absolute terms but it speaks well of the partnership that it's been able to raise distributions in this sort of market. I think we'll eventually see that the drastic sell-off on MLPs has been overdone.  [more]

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2

Thoughts on Apple

January 05, 2009 – Comments (1) | RELATED TICKERS: AAPL

I'm an investor in Apple. My cost basis is around $130, so I was a bit early.  [more]

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4

Some thoughts on Compass Minerals

January 05, 2009 – Comments (0) | RELATED TICKERS: CMP

Compass Minerals is a producer of salt and potash of sulphate. The former is used to de-ice roads in the Midwestern United States. The latter is used in specialty crops, some of which are sensitive to regular potash. Compass derives about 3/4 of revenues from salt.  [more]

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