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05-17-2005, 01:46 PM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Investment Idea: IDSU
OK, I've been busy lately with little time to post, but here's a quickie. The company is Imperial Sugar, a refiner and marketer of sugar. They went bust a few years ago and have emerged as a leaner, healthier company with virtually no debt. Book value is $18 a share, versus the ~$13 current price. I can't think of a way that this company could possibly be worth less than ~$14 per share, even if you busted the thing up and distributed the proceeds to shareholders. I am a serious cheapskate, so I will wait for the next gap down and hope to buy it in the vicinity of $11.
Plus you would get to use all those Homer Simpson sugar episode quotes: "the strong must protect the sweet" and "first you get the sugar, then you get the money, then you get the woman"
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Ezekiel 23:20
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Re: Investment Idea: IDSU
05-17-2005, 01:50 PM
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#2
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Re: Investment Idea: IDSU
So Brewer, how is the new job?
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No more lawyer stuff, no more political stuff, so no more CYA
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Re: Investment Idea: IDSU
05-17-2005, 02:03 PM
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#3
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Moderator Emeritus
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
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Re: Investment Idea: IDSU
U.S. based? Sugar has a nice fat tarriff on imports, artificially raises the price, thus the profit margin. There has been talk lately of removing the tarriff, maybe that uncertainty is depressing the price?
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Re: Investment Idea: IDSU
05-17-2005, 02:10 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Re: Investment Idea: IDSU
Job's not too bad so far, just fairly heavy hours and I am also studying for CFA level III, so I am busy and exhausted.
Yep, IDSU benefits from the tariff. I suspect that the tariff won't go away any time soon, given the sugar industry lobby and all the pandering Congress does to agriculture. If it does, IDSU is still worth almost the full value of the current stock price if you haircut the PP&E and liquidate everything else into cash. If you get it at 11 or less, it is even safer.
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"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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Re: Investment Idea: IDSU
05-17-2005, 02:10 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
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Re: Investment Idea: IDSU
Gotta love the competitive advantage a company builds during bankruptcy. *Brewer, I have been reading pretty good things on this one and the CEO seems to have a pretty solid plan. *However, I tend to get a bit weary with companies that are tied to a commodity. *You think the stock is so cheap the price of sugar doesn't matter? *Or are they in a business that is protected from price swings? Or are they hedged? *By the way I have been * at GIM's price as of late. * *
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"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
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Re: Investment Idea: IDSU
05-17-2005, 03:32 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Re: Investment Idea: IDSU
IDSU: I think that at 11 to 12, it is so cheap that I am willing to take a flier on sugar prices.
GIM: Enh, just a little volatility. I'm in it as a diversifier (<10% of port) and its nice to be able to buy at a discount to NAV.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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Re: Investment Idea: IDSU
05-17-2005, 05:40 PM
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#7
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Recycles dryer sheets
Join Date: Jul 2002
Posts: 422
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Re: Investment Idea: IDSU
I bought my first batch of GIM around 9.0. I was happy to average down a bit cheaper later on. Great diversifier, low e/r and has recently moved more towards Asia (while still holding EU Etc.) and selling at a discount still. And 5-6% div too+good experienced management. Good fit for people wanting to also diversify their bond part of portfolio. Cheers!
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Re: Investment Idea: IDSU
05-17-2005, 05:49 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
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Re: Investment Idea: IDSU
Quote:
GIM: Enh, just a little volatility. I'm in it as a diversifier (<10% of port) and its nice to be able to buy at a discount to NAV.
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No complaints...good buying opportunity
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"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
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Re: Investment Idea: IPSU
05-19-2005, 07:55 PM
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#9
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Re: Investment Idea: IPSU
Quote:
Originally Posted by brewer12345
I am a serious cheapskate, so I will wait for the next gap down and hope to buy it in the vicinity of $11.
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Yikes, Brewer, I sat on my assets for a couple days before I got around to researching IPSU, and guess what the first news article was:
Ridgeland, MS, MAY 19, 2005 (EventX/Knobias.com via COMTEX) -- Schultze Asset Management LLC, which owns a 14.4% stake in Imperial Sugar Co. (IPSU), has offered to acquire the remaining outstanding shares of the company for $17 a share in cash, according to an amended Schedule 13D filed with the SEC. Schultze requires that the company's board respond to its proposal by next Wednesday.
Looks like you weren't the only one keeping an eye on the prize-- hope you didn't wait for the gap down! And next time you recommend a stock, I'll get right on the research.
Maybe it's better this way-- you probably would have been subpoena'd by the SEC the next morning...
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Re: Investment Idea: IDSU
05-19-2005, 08:02 PM
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#10
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Moderator Emeritus
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
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Re: Investment Idea: IDSU
Oh now that wouldn't be so bad, I hear camp cupcake is lovely, and they give out lovely knit ponchos as parting gifts!
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Re: Investment Idea: IDSU
05-20-2005, 01:30 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Re: Investment Idea: IDSU
Dammit! I really shouldn't torture myself with good ideas unless I am actually willing to sell something else to buy the new thing I have found. Looks like someone with a lot more money got to IPSU first. Nice to know my nstincts are generally good. Maybe next time...
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"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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