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Another uncorrelated asset?
Old 10-08-2004, 12:09 PM   #1
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Another uncorrelated asset?

This could be a bit much for some, but I just ran across something that may be worth closer examination: STON. This is an MLP that runs cemetaries. IPO'd last month and has basically sat there like a dog turd ever since. Since I tend to be a gatherer of unconsidered trifles, I will be looking closely at it this weekend. Appreciate any thgoughts on STON or the "deathcare" industry in general.
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Re: Another uncorrelated asset?
Old 10-08-2004, 01:41 PM   #2
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Re: Another uncorrelated asset?

Where'd you dig this one up? This must be one of your crazy plots. That's all I need -- another underperformer. Stop, you're killing me

(Sorry, couldn't resist. Really, I tried.)
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Re: Another uncorrelated asset?
Old 10-08-2004, 01:52 PM   #3
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Re: Another uncorrelated asset?

I haven't even begun to do my DD, but I often find my highest returning investments in the stuff that is ignored or gets thrown out with the trash. This is a company that is small and operates in an industry NOBODY wants to talk about. Sounds like an ideal candidate for a value play. Hopefully my head-scratching will yield a decision on whether this is a great opportunity or a bomb.

One thing I do like about this one: small, undervalued companies can stay that way for years, and as an investor waiting for cap gains, you are stuck waiting it out. In this case, it is set up as an MLP, so it is pretty likely that a hefty yield will compensate the patient.
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Re: Another uncorrelated asset?
Old 10-08-2004, 01:57 PM   #4
 
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Re: Another uncorrelated asset?

Quote:
I haven't even begun to do my DD, but I often find my highest returning investments in the stuff that is ignored or gets thrown out with the trash. *This is a company that is small and operates in an industry NOBODY wants to talk about. *Sounds like an ideal candidate for a value play. *Hopefully my head-scratching will yield a decision on whether this is a great opportunity or a bomb.

One thing I do like about this one: small, undervalued companies can stay that way for years, and as an investor waiting for cap gains, you are stuck waiting it out. *In this case, it is set up as an MLP, so it is pretty likely that a hefty yield will compensate the patient.
Sounds like work to me. - I'm retired
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Re: Another uncorrelated asset?
Old 10-08-2004, 02:38 PM   #5
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Re: Another uncorrelated asset?

Anyone remember Stewart Industries - funeral home conglomerate a while back? I believe it had a good run before it died, heh, heh.

DD - may turn out to be rewarding - especially if the yield is there while you wait.
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Re: Another uncorrelated asset?
Old 10-08-2004, 06:46 PM   #6
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Re: Another uncorrelated asset?

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Anyone remember Stewart Industries - funeral home conglomerate a while back? I believe it had a good run before it died, heh, heh.
What happened to Stewart is that they way overleveraged their balance sheet buying up Mom and Pop funeral homes, thereby creating vulnerability and at the same time creating a cost structure that demanded pricing that the remaining locally owned shops could easily undercut.

It also didn't help that deaths slowed down for a while, and cremation became more popular (with lower margins).

Mikey
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