All-Star Inside Pitch: Slbutton (Rated: 99.78) on WTI
TH: What's your name and background?
SB: My name is Seth Button, I'm from western New York, and I'm working on my Ph.D. in archaeology at the University of Michigan. I'm relatively new to investing: I've been at it a year or two. I almost always shop in the value aisle of the stock market. I like small companies, and I have a healthy appreciation for dividends.
TH: What attracted you to W&T Offshore (NYSE: WIT, Rated: 90.48)?
SB: As an offshore oil producer in the Gulf, it had immediate contrarian appeal. There are also long-term geopolitical considerations that might benefit oil [and natural gas] producers opeRated in the national back yard. Founder and CEO Tracy Krohn has a lot in common with other good CEOs like Middleby's (Nasdaq: MIDD, Rated: 84.04) Selim Bassoul, Garmin's (Nasdaq: GRMN, Rated: 78.50) Min Kao, and Whole Foods' (Nasdaq: WFMI, Rated: 48.56) John Mackey. He's dedicated, knows the business, and is committed to increasing shareholder value -- maybe because he's such a large shareholder himself.
TH: What about W&T keeps you up at night?
SB: If I love everything about a company, I immediately go to the mirror and check for Kool-Aid stains on my mouth and shirt front. There are a hundred things that could create problems for W&T, from hurricanes to oil prices, pipe line damage to derivatives, swap and option contracts to the costs of deep-water exploration and drilling. Though I believe the current price of the stock substantially discounts the Kerr-McGee acquisition, I'll be keeping a careful eye on the 8-K's and 10-Q's.
TH: Finally, what's your best idea in CAPS right now?
SB: Recently I've been doing some diligence on Raven Industries (Nasdaq: RAVN, Rated: 97.91) and Simpson Manufacturing (NYSE: SSD, Rated: 69.93). Though, since I consider my best CAPS ideas those companies which I'm most confident are well-run, with disciplined leadership, strong fundamentals, and room to grow, I'd have to name Middleby, Markel (NYSE: MKL, Rated: 93.18), and Portfolio Recovery Associates (Nasdaq: PRAA, Rated: 90.23). I own shares of all three and will be happy to buy more whenever Mr. Market is willing to offer a discount.