Here's an update on a company that I have written about in the past, SemGroup, for anyone who is interested. [more]
I'm sure that I may be the last person in the world to have seen this video, but it gave me a good laugh:
Here's an interesting article that I just came across which compares the performance of the highest yielding DOW stocks to the lowest yielding ones. The top 15 stocks in terms of yield were down 4.2% YTD at the point that the article was written while the lowest yielding 15 were down 14%. [more]
Here's a link to a recently published article by former Fool Ryan Fuhrmann about ITT, a stock which I currently own for the exact reasons that he describes in the piece. In the aftermath of the recent market implosion, one can get ITT today for 10% to 15% less than my current cost basis. Grumble, Grumble. I wouldn't be grumbling if I didn't already have a full position in it ;).
This Stock Spinoff Looks Like a Good Trade
Action to Take --> ITT currently trades at a very reasonable forward price-to-earnings (P/E) ratio of 10.6, which happens to be right in line with rival defense firms. In contrast, leading firms in the water industry trade at forward P/Es closer to 16, while the largest firms in the industrial segment trade closer to 12 times earnings expectations for the coming year.
This fully supports management's thesis that Xylem and the new ITT Corp should eventually see higher valuations when they are independent. Overall, there should be considerable potential to make money in ITT's break up. Each of three firms will likely be better run as independent companies and there is plenty of room for multiple expansion when the market better realizes the value of the water and industrial businesses. Finally, I see the potential for a rival defense, water, or industrial firm to swoop in and buy out one of these coming spinoffs at a hefty premium.
There certainly has been a lot of carnage during the recent stock market tumble, but one that has really caught my eye is Huntsman Corporation (HUN). It reported a solid quarter, missing estimates by only a penny and its stock is down over 40% over the past couple of weeks. Ouch.
Two major reasons why the company missed estimates are the recent strength of the Swiss currency (which doesn't appear to be about to change) and high commodity costs. This recent implosion in the markets has certainly taken care of the latter. Oil has fallen off of a cliff, so that will help on the cost side. Of course, recessions (if you believe that we're headed back into one) are obviously not great for specialty chemical companies, but I am inclined to believe that the recent sell-off in Huntsman has bee somewhat overdone. It's currently quite a bit cheaper than the average company in its sector looking at a number of metrics, like price/sales, price/book, price/earnings.
The company recently announced a special $100 million stock buyback and it pays a dividend of over 3%.
I'm just starting to sniff around HUN. Is anyone out there familiar with the company. If so, I'd love to hear your thoughts on it. Also, I'd love to hear what other stocks have jumped off the page at you as being exceptionally cheap right now.