I am frequently surprised by the places where I find promising looking stocks, but really I shouldn’t be. Value can theoretically be found in any sector, although the newer and developing sectors are unlikely to hold much in the way of reliably underpriced stocks, since there is so much unpredictability in the future course of […]
It has been observed by me, and possibly other people, that free cash flow, more than earnings, is a correct measure of an equity investor’s true returns (free cash flow is earnings plus depreciation minus capital expenditures). The logic behind this goes back to Benjamin Graham’s notion of calculating true earnings; he said that before […]
I suppose that my loyal readers are tired of hearing me going on about cheap Chinese stocks, but value investors have to go where the value is. Some Chinese stocks, small and overlooked, seem to show up on my screens more often than I would expect considering the China cult, and although HQ Sustainable Maritime […]
You may recall that cheap and Chinese is starting to become a theme on this blog, and today is not an exception. This one, however, has nothing to do with food: it is China Security & Surveillance (CSR), which trades at an exciting P/E ratio of 5.44, although they did pay an unusually low amount […]
I have gone over the details of Capstead Mortgage previously: that their exclusive concentration on adjustable rate mortgages insulates them almost completely from interest rate movements, and the blank check that Fannie and Freddie got from the government makes their loans absolutely safe, so the only thing to worry about is what premium to book […]
I have recommended cheap Chinese stocks as desirable as a way to bet on the possibility that China will be forced to let the yuan float against the dollar, and of course, a cheap stock anywhere is a cheap stock, although markets outside of the first world should be given a higher equity risk premium. […]
It was announced today that CenturyTel will buy Qwest Communications, subject to shareholder and regulatory approval, for $10.6 billion, or $6.02 per share, in an all stock deal. If you’ll recall, way back in June I recommended Qwest as a company with an ample free cash flow in excess of its reported earnings. At the […]
Much of the issues surrounding executive compensation is a concern that the manager’s interests should be aligned with the shareholders’. We have seen large cash salaries giving way to stock and options grants, and now the concern is that CEOs will do whatever they can to juice the price of the stock when their options […]
As my loyal readers may recall, my verdict on Chiquita brands was “Cheap, but evil.” It turns out that the law firm of Boies Schiller agrees with me, since they have recently filed a class action on behalf of 242 Colombians who were the victims of a Colombian paramilitary group that was running a protection […]
One of the chief benefits of value investing is the pleasant feeling of smugness it incites in its practitioners. The impression created among value investors is that we are really the only people who know or care about valuation or fundamental analysis, or who have the slightest hope of achieving long-term investment success. Well, on […]