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A Dearth of Buys

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September 27, 2007 – Comments (5)

I'm not seeing a whole heck of a lot of buys lately.  I ducked out of China Telecom as these big boys started the recent price wackiness, took my 45% and ran with it, so I have a little cash, but there's no stock begging for my attention.

The blue-chip large cap stocks I was very interested in a few months ago have all shot up like rockets, 15-20% gain in a few months on average.  MMM, MO, KFT, YUM, PG, all stocks I'd like to own: they look to be fairly priced now for trailing earnings - and they have earnings yet to go this year which may really be not so hot.  The mid-caps I liked last year - NILE, anybody? - are off the chart and into the stratosphere and I just don't feel like paying those prices even if the business really is impeccable.

MO and BofA look attractive now just based on yield; MO is a despicable company, in the business of poisoning people for profit, and BofA may yet have subprime exposure to deal with.  Duke Power is also something I'd buy today except that my trust fund already owns a giant block of it and I don't see any point in adding to that in my IRA. 

Ordinarily I'd look to sector bets - pharma, including PFE, looks deeply underpriced - but there are a lot of patent expirations out there and the FDA is really dragging its feet on new data and new applications.  I also am already holding enough AMGN that I don't want to put all my eggs in that basket. 

One thing I'd like to hold but don't at the moment is a good restaurant stock.  CMG, BNHN, RUBO, BWLD and even Eldrehad's pick RRGB are all on my radar, but I find that CMG and BWLD are certainly not undervalued, BNHN is a company trying to rise up from 40 years of stagnation and brand expectations, RRGB has thin margins, and RUBO is an embryotic stock.

 Any suggestions?  Dumping things into an index isn't what I need to do right now; "Diversification is only necessary if you want to be wrong."

5 Comments – Post Your Own

#1) On September 27, 2007 at 12:33 PM, ikkyu2 (98.25) wrote:

Er, in the list of large caps I'd like to own, I typed MO when I meant KO.  If anyone cares.

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#2) On September 27, 2007 at 2:16 PM, Bman409 (< 20) wrote:

Check out PDA and SDA.. both food companies in South America


Both have been very strong.. I've made money on them.. not too volatile

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#3) On September 27, 2007 at 3:05 PM, rd80 (95.05) wrote:

YUM or MCD for your restaraunt?  Neither one's cheap, but they're not in CMG multiple territory. 

FWIW, I think the new lobster burrito is going to do good things to RUBO's same store sales for this quarter.  But it does have the risks that go with micro caps.

Diageo maybe?

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#4) On September 27, 2007 at 3:26 PM, ikkyu2 (98.25) wrote:

Diageo's not a bad idea, but I already own quite a bit of Brown-Forman.  I'll have to take a look at the balance sheet.

 

Thanks for the ideas so far folks.. keep 'em coming? 

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#5) On September 27, 2007 at 3:31 PM, ikkyu2 (98.25) wrote:

Every time in the last year I've looked at YUM I've thought to myself, why the H-E-double-hockey-sticks don't you own some of this, again?  And now as I look at the numbers I find myself thinking it again.

 

Hmm. 

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