Prea2, By all means pick up Security Analysis for an in depth read. I read the 1934 version and would recommend as many of the distinctions of companies that could be broken up for cash are made similar to your example. For a more workable read Graham's "intelligent Investor" has similar content but is much easier to digest. Also if you can find "Vulture Investors" Hillary Rosenberg, you may enjoy reading of the various styles of Value investing. Value line has a weekly listing of stocks selling below book value, plus the write ups are pretty thorough. The 10 week trial for $55 is well worth it. The are selling a year for $299, so don't pay the $485- value lesson 1 The analyst comments are worthwhile, and it is grouped by industry. Barrons has a list of 13D Filings and EDGAR should have them as well for purchases/sales of 5% of a company. You may be able to piggyback on the ideas of value guys like Whitman and Gabeli who are activist share holders. Finally, debt is a good way to buy value since you collect a dividend while you wait and if the co improves the bond price will appreciate. I use www.morningstar.com to evaluate the basic holdings of a fund, I prefer to purchase my debt through funds since it is hard for a small trader to purchase a diversified portfolio of bonds. Regards
I agree with all that you say. I am currently midbook on grahm (newest addition). I am curious on thv though. Can any of you find anything at all seriously the matter with it that would explain it's 1.05 price? I've taken quite a lot for my first serious shot at investing. I'm a trader at heart, but I just find that I have way more capital lying around than I can possibly employ intraday.
The best way to get this puppy movin is get yourself 100 Yahoo IDs and start pumpin it on every board you can find. Aside from that research is hard to find, YAHOO has some stuff for sale if you are so inclined. Profit Margin is (-2.4%) vs 4.6% for the industry. ROA is -3% vs 6.4% for the industry and Sales per employee is about $100 vs $150 for the industry. The cash according to yahoo was .3$per share, and book is 4.97$ the bad of that is it is made up of 59 Million in goodwill. If you take that away, the tangible assets are (negative). I got this from Yahoo Balance Sheet. Now for the good. Insider ownership is 75% of stock, (of course Howard Hughes saved his fingernail clippings), but this much ownership is usually a good sign. Institutions have been buying. SG&A has remained constant and Revenue has stayed stable. Interest expense has dropped by about 1/2 per the debt refinancing. Management plans an expansion which will build revenue if things work out. The only other question I would have is who they sell to? It appears from the Revenue that they just sell to homeowners. This is a business with 0 barriers to entry. Any two guys/gals with a truck and some tools can compete with them. All in all if you find 15-20 of this type story and spread your money out, you should hit a few homers and whiff at a few.
I have close to 55k shares now. I really believe in the company. I don't intend to go around hyping it. I hate those types of people, and I refuse to degrade myself to their level. In all honesty, I kinda want it lower to I can take some more at good prices. I am not looking at it as a bookvalue type play. The assets are mainly goodwill. The best asset is the ceo in my opinion. I agree that there are no barriers to entry, but at the same time they seem to be competing directly with home depot which must be pretty damn cheap, and they're still making money. If you look at the earnings and take out the goodwill amortization, I think you really have a success story. I just can't understand why it's this low. There has to be something rather serious that I'm just not understanding. That's the only reason I brought it to this board's attention. Maybe someone here understands something about the company that I just don't get b/c i'm a novice.
My opinion is the reason for the lower price is that they are not as efficient when compared to the peer group. But that is just an educated guess. For instance if ROA was 10% vs 6% for the industry you could make a good case for higher value. For the kind of money you have tied up, and your interest I think it would be well worth a hundred bucks or so to buy some of the speciality research that yahoo has offered from various brokerages. Then you might find about this co, and find a few niche analysts that you like that deal with value plays. Hope to read about you knocking off Buffet as king of value one of these days. Regards,
As far as Buffett goes, he's through. Just read his annual report. It summs everything up. He needs a dozen elephants just to keep pace, and there aren't that many plays out there. He's so big that he's become the market. You can't compete like that. I'm pretty confident that I'll trounce any numbers he's thrown up or will throw up in the future until my account is at least 10m.
You think Howard Hughes is something. I cut my own hair and save it. I have the biggest hairball you have ever seen sitting in my backyard... P.S. P2, I hope you do well with THV. I wouldn't have the nerve to put that much dough into a $1 stock. Good luck. Just remember, don't ever fall in love with a stock.