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Value Investing

A Rock-Solid Stock Recommendation

September 27, 2008
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At the beginning of August, Cabot Benjamin Graham Value Letter featured four buy recommendations that collectively have outperformed the stock market indexes by a noticeable margin.  I’m featuring one of the stocks here because it’s still clearly undervalued. Colgate-Palmolive (CL) was founded in 1806 by William Colgate in New York City and, after many mergers, acquisitions and transformations, has grown into the leading worldwide manufacturer and seller of toiletries, detergents and other household products.  The company dominates the toothpaste and soap sectors and derives 67% of its sales outside of North America. Four years ago, management initiated a four-year...

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Readers’ Tired of Business as Usual

September 26, 2008
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A month ago, I wrote an article about the energy problem in the U.S. that, in my opinion, has been caused by our government’s lack of action to produce any kind of energy plan during the past 35 years.  I quickly learned that a lot of other people have similar concerns, and many of you were kind enough to send me your thoughts.  Below is a potpourri of the emails that I received. Please add your views to the discussion here! — “Your comments on government inaction and energy tend to make me angry as well. Where has Congress...

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More on Ingersoll-Rand

September 19, 2008
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Today instead of a Q&A with Roy, he’s going to elaborate on a stock that he touched on in yesterday’s post. Ingersoll-Rand (IR) is a global manufacturer of climate control equipment, energy efficiency systems and security locks and doors.  Products include Thermo-King walk-in coolers, Schlage locks, and Trane air conditioners.  The company has been divesting cyclical slow-growth segments, such as heavy machinery, and acquiring companies, such as Trane, that offer better growth potential.  Ingersoll is also expanding rapidly overseas to diversify away from its U.S. business (54% of sales). Management’s long-range plan to change Ingersoll from a cyclical company...

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Buying and Selling Ingersoll-Rand

September 18, 2008
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Here’s the fourth question in our value investing Q&A series. Please send us any comments or questions. Question: I would like to buy IR at 38, when would I sell if it kept on going down?  Thanks. Answer: Thank you for your email regarding Ingersoll-Rand (IR).  The stock has been selling at a bargain at around 34 recently.  You have chosen an excellent company that will hopefully become a solid long-term investment for you.  The volatile market that we are in will probably cause some volatility in IR shares as well.  If IR drops 15% to 31.25, I advise...

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Problems with Garmin

September 17, 2008
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Here’s the third question in our value investing Q&A series. Please send us any comments or questions. Question: I bought Garmin at 44.  Shortly and suddenly, it went south about 10 points to 35.  What surprise caused such a precipitous drop?  I read that they are stacking up inventory instead of sales, and their new phone product is not ready on time, and they have competition from others cell phone products. I just subscribed recently and this is the first recommendation from you that I bought.   What do you think of the company’s ability to climb out of this...

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