The Genius Guide to Value Investing
Archive for October, 2011
Stock Ideas for October 5, 2011
Posted by Brian Ross in Buying, Stock Picks on October 5, 2011
The market has been seesawing up and down. As I have mentioned in previous columns, this is apt to happen for a while. People are nervous, and when they panic it rains carnage that is the carrion of a good value investor’s diet. Here are some ideas:
MBT – Mobile Telesystems (Mobil’nye TeleSistemy OAO) – I’m not taking a huge stake in this Russian telephone company that is as big there as AT&T or Verizon is here. The uncertainties of government always loom in post-Soviet Russia. This company not only has great growth potential, it is also turning out an 8.8% dividend on yesterday’s closing price. It also was trading at over double its current price within the last 52 weeks. The rest of the world economies drag on price more than anything organic to MBT’s marketplace.
EXPD – I like logistics companies. High cash flow, low overhead, and very low debt. They don’t own anything. They broker the deals to get freight moved at better prices. We held on to Forward Air for years, until it hit a peak before the last roller coaster and we sold it. Expeditors International of Washington is the performance leader among non-asset-based freight-forwarding and third-party logistics providers. This blue chip logistics firm, which pays a sub-inflation 1.3%, looks like a good buy as long as it stays below 41.00 a share.
We go in and out of 3M (MMM) as prices dictate. The company is on the bottom of a cycle pushed down only by larger economic forces. It’s a good buy below $80.00.
France Telecom (FTE) is still a great acquisition. They own a huge chunk of Europe, and are making other international inroads Their stock pays out a 10.10% dividend at yesterday’s close. Not bad.
With a long time horizon in mind, two of the larger housing builders with the legs to ride out the current recession I acquire when they hit bottom-feeder prices. KB Home (KBH) and Toll Brothers (TOL) are lean, mean, and well run. Banks don’t want foreclosed properties, so they’re pushing short sales hard. There will be a bubble of these that will soak up much of the housing demand for a year or two. After that, as inventories in over-extended properties dry up, building can begin back on the road to normal. These two builders look to profit the most from the recovery. KB Home pays a 4.5% dividend that warrants your patience and is a bargain today at about 5.55. It’s a deal under 9.80. Toll Brothers does not, but also has a great footprint once we end this long, gloomy part of the cycle.
Remember that all of these stocks are suggestions and based on actual purchases made. You should research further on your own, ask your stock guru, investment advisor, priest, rabbi, mystic or whomever else gives you investment guidance.
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