Forum Picks

[maddythebeagle]

FWIW, I have been buying and selling MGEE for many years............

I know a bit about them being in WI, but never invested....somebody on drip investing boards from madison invests in them...nice dividend...

Anybody have anything in the mid to large cap dividend payers that are down and out? looks like 3m has bounced back...jnj still looks to lag a bit...also been taking some shots of Brown Forman....

 

[semtex]

FORG
Entry point: 1.16
Time: one week ago
My thesis:
1. Net cash 14M
2. Settlement 20M with 9 corps, after lawyer fee, 12M
3. Remaining 6 corps (assuming 8M net).
4. It has cash flow positive software business with 4M revenue/year.

So cash (14+12+8)/25=1.36/share

 

[FinanceDude]

Hey, FD, don't go off in a huff. I for ne am genuinely interested in any ideas. But I really value careful analysis and tangible cash flows from anything I buy.

MGEE is Madison Gas and Electric, the primary utility in Madison, Wisconsin. They are a small cap utility I use as a core holding. While their yield is moderate (about 4%), they have been using a lot of their free cash to update their current infrastructure, buy out some small town utilities around the state, and improve their efficiencies.

I always increase my holdings when the stock pulls back under $32. In my neck of the woods, people like it a lot better than Wisconsin Electric, and I can'tblame them. Certainly anything under $32 would be a bonus. I imagine they will raise the dividend in a year or two after all their expenditures on various improvement projects are completes. Just a steady broing stock............ Dividends are $1.39 a share..............

 

[semtex]

Forg will up big on Monday. It just settled with DirectTV at 8M. Target 1.7, maybe 2.

 

[unclemick]

Duh - why sell? I want the 'never sell stock' that allows the butler to steam press my best Jimmy Buffett shirt while the maid brings the latest tropical punch out on the veranda of my villa next to Sir John.

Remember Hamlet and fastenal(FAST) back a ways?

Aetna is hardly a screamer - but they cut their dividend, dumped their boss, and have been trying to get back to basics the last few years. Unlike me some of those other baby boomers may need medical insurance.

I'm not a trader - looking for that wish upon a star stock!

heh heh eh - BTW - my steady boring stock (Hydraulic) morphed into Aqua America (WTR) still a water ute.

 

[retire@40]

MGEE is Madison Gas and Electric, the primary utility in Madison, Wisconsin. They are a small cap utility I use as a core holding. While their yield is moderate (about 4%), they have been using a lot of their free cash to update their current infrastructure, buy out some small town utilities around the state, and improve their efficiencies.

I always increase my holdings when the stock pulls back under $32.

Any reason why $32 is the magic number? I haven't looked into the stock, but when you say you always increase your withholdings when the stock goes below $32 makes it sound like it happens frequently.

 

[maddythebeagle]

Duh - why sell? I want the 'never sell stock' that allows the butler to steam press my best Jimmy Buffett shirt while the maid brings the latest tropical punch out on the veranda of my villa next to Sir John.

I am with you UM....

 

[semtex]

FORG up 16% AH. My 1.7 target seems too convervative.

 

[brewer12345]

MGEE is Madison Gas and Electric, the primary utility in Madison, Wisconsin. They are a small cap utility I use as a core holding. While their yield is moderate (about 4%), they have been using a lot of their free cash to update their current infrastructure, buy out some small town utilities around the state, and improve their efficiencies.

One of the things that makes me a bit queasy about electric utilities these days is that coal prices have moved way up compared to 5 years ago. As old coal supply contracts roll off, many utilities are exposed to much higher fuel prices and have to go begging to the PUCs to recoup the cost of fuel. Any clue what the deal is with MGEE on this front? I also occasionally think about NJR and Green Mountain Power, but the huge run they have had over the past several years makes me wary.

 

[wildcat]

Splits/Spin-offs (a lot are upcoming):

A) Temple Inland - Will divide into 3 companies 1) real estate w/timber assets 2) manufacturing 3) financial services
B) EMC - Fast growing tech unit VMware
C) Marshall Isley - Fast growing financial processing unit Metavante
D) Tyco - Will split into 3 companies, Tyco healthcare division does $8-9 bil in revenue and only contributes apprx 1% of it into R&D vs. comps of 8-9% (appears to be way underfunded)
E) Morgan Stanley - Will dispose of Discover
F) American Standard - Will split into 3 companies
G) Amerisource/Kindred - combined to form an institutional pharmacy; direct (and only real) competitor OCR
H) NCR - Will spin off Teradata
I) BR - Broadridge Financial Solutions; spun off of ADP; do back office brokerage/financial processing; basically do the crappy grunt work brokerage firms don't wanna do.

Of the ones above, Metavante is my fav business but I am not sure what the valuation will be. I am not sure how these will play out as they haven't happened yet but worth watching for the stock junkie crowd.

 

[kumquat]

I still like fertilizer stocks. POT, AGU, MOS, SQM, ICL and Yara. My favourite is POT and it's 30% of my net worth so take as many grains of salt as you feel appropraite.

My take on POT
Upsides: lots of FCF to fund (low cost) expansion; high barriers to entry (at least for potash and phosphate); rising demand (at least for now).

Downsides: sky high P/E; politics of biofuels, I don't think they are economic but governments are pushing them big time; drop in Asian economies could kill food demand; up bigtime over the last 3 years so maybe little room left; miniscule dividend; Cramer likes it

It may not not be a big winner short term but I think it's a buy and hold over the next 5 years.

DYODD, Just my pick and I've been wrong many times

 

[semtex]

Kumquat:

Could you give some light why you like Yara? I watch it closely.
Thanks,

 

[wildcat]

Hey don't tell HFWR you can invest in POT. I imagine he will liquidate everything.

 

[kumquat]

Kumquat:

Could you give some light why you like Yara? I watch it closely.
Thanks,

Yara is a fertilizer stock. I like them all. Last time I looked (a while ago), Yara's P/E was lower than the others.

My favourite is POT, but the others exist and may be better if you can find a reason why. The only one I own (or would buy) is POT.

 

[REWahoo]

Yara is a fertilizer stock.

Yep, I know the feeling. Way too many of my stock picks turned out the same way.

 

[kumquat]

Yep, I know the feeling. Way too many of my stock picks turned out the same way.

Surprising how many of my picks turn to 'fertilizer' , don't trust me but do your due diligence!

 

[semtex]

Kumquat:

Yes, Yara's pe is around 12 if I　ｒｅｍｅｍｂｅｒ　ｉｔ　ｃｏｒｒｅｃｔｌｙ．　Ｉｔ　ｐａｙｓ　ｓｏｍｅ　ｄｉｖ．　Ｉ　ｗａｔｃｈ　ｉｔ　ｉｎ　ｔｈｅ　ｌａｓｔ　ｆｅｗ　ｍｏｎｔｈｓ．

Ｉ like how it makes the fertilizer. Maybe I　ｎｅｅｄ　ｄｉｇ　ｉｔ　ｄｅｅｐｅｒ．　

Ｔｈａｎｋｓ，　

 

[brewer12345]

Splits/Spin-offs (a lot are upcoming):

E) Morgan Stanley - Will dispose of Discover

I did some digging on Discover already and I will probably end up buying some of it. I think it is a reasonably attractive business that will get absolutely dumped regardless of price by most of MS' stockholders, so I think it will be cheap. Under $20 a share would have me backing up the trunk even though the business model has certain flaws and is sensitive to deteriorations in consumer credit. I would also guess they will pay a decent dividend.

Didn't know American Standard was splitting up. Any idea on timing?

 

[HFWR]

Hey don't tell HFWR you can invest in POT. I imagine he will liquidate everything.

Yes, officer, it's an investment...

(In my sanity...)

 

[wildcat]

Didn't know American Standard was splitting up. Any idea on timing?

Sorry for the delay Brew. From the 10Q, ASO changed their mind and decided to sell the kitchen and bath division. Proceeds are being used to improve the balance sheets of the two remaining businesses - Wabco (no relation to Wab) and Trane. They intend to focus on Trane and Wabco is kind of the red-headed stepchild even though they have a leadership position in their market. The papers to spin off the Wabco division have been filed with the SEC and they are awaiting for approval to go forward.

 

[brewer12345]

Oh well, so much for that idea. I was really interested in the kitchen & bath biz, although I suppose Wabco could be interesting.

Anyone know if there is a site or research service that tracks spin-offs?

 

[wildcat]

I find most of mine on Google - type in "spin-off 2007" or "spin off 2007" or add "announced" can help. I don't know of a particular site. You could check CSD's holdings from time to time. It's a spin-off ETF but from what I know they only add/hold spin-offs that are 100% independent (not those where the parent company retains a majority stake).

 

[FinanceDude]

Seems this thread has died a little. Any thoughts on AOD? I have done some due diligence on it and I like the strategy. Most strategies like this use options to make the dividend work, but this one doesn't. Decent yield...........

 

[brewer12345]

Isn't there an open-ended fund that follows a similar strategy with a longer track record?

 

[FinanceDude]

Yes, it's ADVDX, but you can save the 1.19% expense ratio, and buy this.

It was the largest closed end fund IPO in history when it went live in January. About $3.9 billion in it already. I am thinking about it for some clients who like dividends. Looks like they try to keep a lid on big cap gains situations..........