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U.S. Stocks Cheapest Since 1990 on Analyst Estimates (bloomberg)


dcollon
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As far as the eye can see!  Glorious future abounds forevermore!

 

Buy, buy, buy.  Buy that fund you sold in 2009!

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I didnt even click the link but I am guessing Grantham is closer to being right when he says stocks are expensive right now

 

He does think they are expensive, but he sees stocks more likely than not going to 1500 or 1600 by October 2011.

 

http://www.gmo.com/websitecontent/JGLetter_ALL_1Q10.pdf

 

"the line of least resistance is a market move in the next 18 months or so back to the old highs, say, 1500 to 1600 on the S&P, accompanied by an equivalent gain in most risk measures, followed once again by a very dangerous break."

 

Further, he is overweight emerging market stocks because (although he thinks they are expensive now) he sees them getting far more expensive.

 

 

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The market reminds me of a lump of dough, ie bread-making, that has to get punched down. But even so, it contains nutrient value!

 

And not everything for sale in the market is overpriced. Even a generally puffy market can provide some decent opportunities.

 

So yeah, I've been buying the past few weeks - a couple of oil & gas drillers. Looking for nat gas to get less abundant over next 12 months (ref Henry Groppe article, Globe & Mail, Apr 19th), idled drilling rigs to get put back to work, day rates to get opportunistic. Steel prices are going higher and already-built rigs are in some cases worth more than they are being carried on balance sheet. Not anticipating another peak of drilling activity, but merely a return to normal. If not sooner, then later - asset values should provide a margin of safety, share price support even if earnings do not justify above-cost pricing.

 

This sort of trough has happened before, 1999-ish, and those who bought into drillers then ended up pretty happy.

 

Drillers and integrated oils make up about half of my shareholdings in portfolio.

 

 

 

 

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So did anyone here buy anything past few weeks? Just curious.

 

Yes, I bought some health care-related stocks. 

 

My portfolio consists of financials, lease cos, health care, and SFK.  I'm quite happy with it. 

 

Gonna keep a substantial amount of cash on hand though.

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I didnt even click the link but I am guessing Grantham is closer to being right when he says stocks are expensive right now

 

He does think they are expensive, but he sees stocks more likely than not going to 1500 or 1600 by October 2011.

 

http://www.gmo.com/websitecontent/JGLetter_ALL_1Q10.pdf

 

"the line of least resistance is a market move in the next 18 months or so back to the old highs, say, 1500 to 1600 on the S&P, accompanied by an equivalent gain in most risk measures, followed once again by a very dangerous break."

 

Further, he is overweight emerging market stocks because (although he thinks they are expensive now) he sees them getting far more expensive.

 

 

 

I share his thoughts. I think things are expensive, but my stocks are cheap. He is doing high quality large cap, I am doing beat up small cap. I dont see a bubble, but see it as a time to be careful. I am moving into things that havent run up. Drillers, O&G, and a few odd and end stocks. I am fully invested at the moment.

 

Here is another good interview - http://video.ft.com/ search Grantham.

 

Tx you still holding onto ATSG.

This month I bought ATSG, SFK, ;D. I bought KSP today, it reminds me of BBEP.

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Tx you still holding onto ATSG   ;D. I bought KSP today, it reminds me of BBEP.

 

Yeah, definitely.  I was tempted to sell a little bit after the huge run up, but after our discussion, I realized that would be stupid.  Thanks for that. :)

 

Will have to check out KSP.  Looks interesting.

 

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Well things seemed cheaper last year at this time IMHO.....

 

I have pretty much stopped buying for the moment - I am content to watch my various holdings rise, sell a little here and there, to build up a cash position. 

 

Lots of time to read and learn about companies for future busts.  Were only 22% below the all time highs. 

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Thanks to you as well. Your numbers reinforced my thoughts on it. Its hard to hold out ATSG and SFK are becoming my portfolio as they continue to go up. I will relook at ATSG at $7.50 and will likely sell some, I would be open to selling all at $10, I will have a hard sell target once I see Q3 earnings and get a feel for the contracts impact.

 

There is a VIC writeup on KSP. I havent seen it due to me only having 45 day access. If you have full access have a look and let me know what you think.

 

KSP cut there div and quickly fall from $20 to $9. I look at it like a REIT due to debt levels. They had $6 million in distributable cash flow. Things could get worse, but they have newbuilds coming online with contracts at decent rates. I assume that the growth and the future declines net out and take $6 million as a run rate for the year. I ignore the debt due to the long live assets.

 

KSP is in the Jones Act and has a bit more protection than the average shipper. Even given this they trade based on refined crude volumes and the business has gone south over the last few months. They cut the div because they are tight on covenants and have no visibility (contracts rolling off and operators refusing to sign new long term ones (they only want short term ones). Investors hate them because they raised cash with shares at $20 plus then cut the div. Sucks for them, but should workout well for those getting in now.

 

So with $6 million for the q, we get $24 million in distributable cash flow for the year vs a market cap of $182 million. For me this is a worse case scenario. It could get worse for the last Q or the next one, but the new builds should cushion any additional declines.

 

The company generated Ebitda of $80 million a few years back, and removing the single hull ships from the Jones Act fleet will solve any supply and demand problems. Seems like BBEP, let them fix the balance sheet, and sell when it doubles and the dividend is reinstated. I bought now because they announce in a few days. It could go down a few bucks, but could go up. I didnt want another stock to get away from me. I have lost 3-4 due to a raising market. HALL which was on the buylist is up 50% over the last 2 weeks, I couldnt buy because I was out of capital at that point. I dont think it will take longer than a year for things to be sorted out.

 

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzYyMTQyfENoaWxkSUQ9MzU1NzU2fFR5cGU9MQ==&t=1

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I did enjoy reading Grantham's piece this quarter. Low interest rates (and they will likely stay low) may fuel risk markets more than most expect. FFH is a great way to play this possibility. I am looking forward to Q1 earnings this week to see what is going on.

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There is a VIC writeup on KSP. I havent seen it due to me only having 45 day access. If you have full access have a look and let me know what you think.

 

I don't have full access.  I've never applied for a full member spot. 

 

But I'll probably try to take a look at KSP over the next week or two if I have time.

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