Use access key #2 to skip to page content.

October 2007

Recs

2

Cheeky post: Maiden Voyage of the SIA A380

October 24, 2007 – Comments (0)

Today is the maiden voyage of the Singapore Air A380 from Changi Airport to Sydney. This plane has several interest first of sorts:  [more]

Recs

2

Earnings Conference Call Transcript Website

October 23, 2007 – Comments (0)

here is the url : 

http://www.seekingalpha.com/tag/transcripts

 

raytoei

(who has bookmarked the text for Ecolab, Apollo Group and Western Union)

Recs

6

My no.1 Request for Improving Caps Blog

October 22, 2007 – Comments (4)

   [more]

Recs

4

Applying Kelly Criterion to Investing

October 20, 2007 – Comments (0)

Hi,   [more]

Recs

1

Tribune Co (TRB): Max Pain on Shareholder concern about FCC ruling

October 19, 2007 – Comments (0)

As I write this TRB is down 8+%, this is due to possible delays in the Tribune going private (employee owned) transaction. The delays stems from the FCC wanting to push for more relaxed rules on media consolidation (currently there are certain restrictions as to the number of TVs or Newspaper a company can own), this presumably will help Tribune Co. since the current waivers does not apply under a new owner.   [more]

Recs

2

The dividend yields at Washington Mutual is an eye-popping 6.6%

October 18, 2007 – Comments (1)

Due to WM's high exposure to the mortgage business (19m home owners), the stock has dropped quite a bit in the past 2 months. The current yield is now 6.6%. Ie. every $100 you'd invest in WM, you will receive $6.6 back (before taxes). This is a very good deal considering:  [more]

Recs

2

Review of Portfolio (Part 1)

October 15, 2007 – Comments (1)

This is part I of my portfolio review, this should be read in conjunction of my previous post, "Portfolio Returns and General Comments" found here: http://caps.fool.com/Blogs/ViewPost.aspx?bpid=19462&t=01007210973180217446


American Express Company (AXP)
Currently 3.24% of Portfolio, bought a 2/3 position
Gain of 4.7% since purchase in Feb & May 2007

AXP Is firing all cylinders, ROE, ROA and margins are all at near historic highs while the valuation is still quite low in terms of P/E (below 20). After the divestiture of Ameriprise, I expect continuous margin improvements and better adoption and usage outside of the US.

Fairly healthy buying and selling of insider transaction for the last six months. My current buy in price for the last 1/3 position is at $53 though I may buy at a lower discount due to the quality of the company.

Popular, Inc (BPOP)
Currently 3.04% of Portfolio with a 2/3 position.
Gain of -19.3% since purchase in Feb & March 2007.

I like BPOP as it is one of the better banks in Puerto Rico being thrown out with the bath water due to recent sub-prime / credit issues. Recent problems are manifested by the reduced ROE/ ROA and margins. Key concern about this company is that the BPNA business is highly competitive and may forebode lower margins as the bank tries to grow in NA. This traditionally run bank still has 5.9% held by insiders.

My conclusion is that it isn't cheap enough for me to initiate the 3rd position yet. My current buy-in price is $11.30. I like the current yield of 5.3%

Berkshire Hathaway 'B' shares (BRK-B)
Currently 16.33% of Portfolio with a full position
Gain of 32.21% since initial purchase in 2004 and bulk of purchase in Sept 2006.

This company is undervalued, it is selling at a "Warren Buffett" discount since the funny logic is that if Buffett can't manage it one day, the company will fail. I see BRK as a ballast in my portfolio, an insurance against squalls like the one experienced in Feb and mid-August. BRK will never do as well as the growth companies during periods of relative calm. (See my previous postings this month on BRK)

Some of the articles I have read put BRK at a fair value of $4700, I put a watchlist to buy-in price of $3600 since I already have a full position.

Buffalo Wild Wings (BWLD)
Currently 5.07% of my portfolio with a full position.
Gain of 180% since initial purchase in 2004, 2005 and 2006 with pre-split prices around $24 to $31.23.

3 Questions for BWLD: Is it overvalued ? How many stores does it have currently ? and is the cash flow still growing ? No doubt everyone loves BWLD now, the recent Sally Smith interview in Forbes was very well received. The stock *is* ahead of itself and insiders have been selling the stock.
But I think for the patient investor, the story isn't complete yet since BWLD has only started this year/late last year to go national. It has 446 stores (as of Q2) and the stated aim is to reach 1000 restaurants. The cash flow is still growing.

Having said that, I expect the stock to be volatile as the market will over-react to Wing Prices, Avian Flu or increased competition (although there isn't a serious contender to BWLD at the national or regional level yet). I may be tempted to buy at further dips, and I have a buy-in price at $35

Discover Financial Services (DFS)
Currently 1.84% of my portfolio with a 1/3 position.
Gain of -0.94%  since initial purchase in early August 2007

I like DFS having good success with Mastercard previously. This is the weakest card company though the anecdotal evidence is that the loyalty and quality of the customers is very high. DFS is more like AXP than VISA/Mastercard since it owns, acquires and manages the customer directly rather than co-brand with banks.

I currently have a buy-in price at $20.50, this reflects the lackluster quarter  it had which pushed the P/E from 10 to 12 due to reduced earnings.

Georgia Gulf Corp (GGC)
Currently 2.04% of my portfolio with 2/3 position.
Gain of -33.72% since the initial purchase in Feb and March 2007

This is my worst performer. My heartbreak ridge. The price is ripe for the last 1/3 position to be invested in GGC, and yet, the balance sheet is not safe. Ideally, you'd want a high uncertainty but low risk deal. The situation with GGC is that it has high uncertainty but it is no longer a low risk.  If you back out the intangible assets, then you'd find that equity is negative for GGC.

I bought GGC because it was cheap but the management was a lean operator, and it managed to complete a full business cycle in the last 10 years with very high ROA and ROE. The thesis is still there but the company is walking a tight-rope on its debt covenants, compound the problems with the overall building market and it is very hard to justify a 3rd purchase.

Insiders still own slightly under 8% of the company and there was a small insider buy in August of around 100k.

The company has managed to slash cost by 130m from the RGT acquisition and expects to save costs by another 50m in 2nd half 2007.

My action item on GGC is to wait for results on 1st Nov, and watch out the following:

* No deterioration of cash, ie. no cut-back on Dividends, no additional borrowing or dilution of shares

* Continued improvements in cost-cut backs.

Everybody has given GGC up for dead (S&P, BB&T, HSBC, Mornignstar). This company is on the top 21 of the most shorted company list. The funniest research report comes from PriceTarget Research, where GGC has a current overall rating of F (lowest Rating).

If I can see evidence of a safety, I will pull the trigger on the last 1/3 position.

(( to be continued))

raytoei  [more]

Recs

2

Portfolio Returns and General Comments

October 14, 2007 – Comments (0)

   [more]

Recs

1

Calculating Victor Niederhoffer's Matador fund returns

October 14, 2007 – Comments (0)

According to the New Yorker article,   [more]

Recs

1

Brk is on a tear ...

October 13, 2007 – Comments (0)

...this year.. the noise level on the TMF BRK board is full of grumpy old men, about the chairman not dishing out dividends, and that the stock hasn't moved in ages, and that other less-worthy stocks has been beating BRK stock in the past 5 years.  [more]

Recs

1

Silly fact: Oracle bids 6.66 bn for BEAS(t)

October 12, 2007 – Comments (0)

666 the mark of the BEAS(t). Saw this tidbit on WSJ. :)

 

raytoei 

Recs

5

WSJ Article: Victor Niederhoffer loses a fund (again)

October 10, 2007 – Comments (1)

Victor Niederhoffer is quite an interesting character. I first came across his name from an excellent article by Malcolm Gladwell, ( http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm ), let me quote a passage:  [more]

Recs

1

Prep Work on 2008 Berkshire Hathaway Meeting

October 08, 2007 – Comments (0)

I posed a question on a different board regarding early bird specials.   [more]

Recs

1

Article: Good Summary of key issues in Tribune Deal

October 07, 2007 – Comments (0)

 Article: Good Summary of key issues in Tribune Deal  [more]

Recs

1

My silly attempt at making Linkedin.com more... shall we say, interesting ?

October 04, 2007 – Comments (0)

thanks to all those who responded to my request for endorsement on
  [more]

Recs

1

Punters post the odds of the Tribune Buyout

October 02, 2007 – Comments (0)


Trib buyout not looking good Bloomberg News 154 words2 October 2007Chicago Sun-Times

......   [more]

Featured Broker Partners


Advertisement