STOCKMANMARC

A Look Back: Ben Graham Nuggets Trounce The Market

2010-03-24T12:24:00.000-07:00

Over the last year and few months I wrote a couple of posts high lighting the famous value investor Ben Graham titled "A Few More Ben Graham Nuggets" and "Ben Graham Nuggets Part 2". Both post high lighted a basket of seven stocks, notice the number... "7"... Lucky number seven (ha ha).

For those not familiar with Ben Graham, here is a quick catch up. Graham is considered the Father of security analysis and value investing as practiced by many value investors today. He wrote two best selling books "Security Analysis" (1934) and "The Intelligent Investor" (1949) that are still in print today. He also ran a money management firm called Graham- Newman and taught at Columbia Business School. Among some of Grahams disciples are Walter Schloss, Irving Kahn and the most famous Warren Buffett.

All the issues mentioned met the following criteria:

Current ratio of 1.5 or better
A Book Value of 1.5 or less
A p/e ratio under 15
Positive eps growth over last 5 years
Very low or NO debt
Pay a dividend

These are not dyed- in- the- wool Ben Graham screening techniques, but rather based on Graham's many years of teaching, writing, and investing. However these 14 stocks mentioned fall under bargain issues. Their are many ways for screening when searching for value stocks, such as earnigs yield used by Joel Greenblatt of Gotham Capital and "The Little Book That Beats The Market". Their is also CROIC (cash return on invested capital) coined by Joe Ponzio over at FWallStreet.

Company	Ticker Symbol	Closing price on Oct 30Th 2008 $	Closing price on March 24Th 2010 $	Cumulative Return
Abercrombie & Fitch	ANF	27.06	44.38	+64.01%
Ashland	ASH	21.98	53.43	+143.08%
Bel Fuse	BELFB	18.70	22.04	+17.86%
Movado Group	MOV	14.29	11.79	-17.49%
Nam Tai Electronics	NTE	7.28	4.91	-32.55%
Seaboard Corp	SEB	1098.00	1389.75	+26.57%
Thor Industries	THO	17.50	31.78	+81.60%
			Total Cumulative Return Graham Nuggets	+40.19% return	S&P Index cumulative return Oct 30Th 2008 thru Mar 24Th 2010 954.09-1167.72	+22.40% return

Company	Ticker Symbol	Closing price on Dec 10Th 2008 $	Closing price on March 24Th 2010 $	Cumulative Return
Intersil Corp.	ISIL	9.36	14.74	+57.48%
Lufkin Industries	LUFK	35.26	79.48	+125.41%
bebe stores	BEBE	6.64	9.40	+41.57%
Heidrick & Struggles	HSII	20.66	28.21	+36.54%
Titanium Metals	TIE	8.54	16.71	+95.67
Williams-Sonoma	WSM	8.59	27.72	+222.70%
Williams Pipeline	WMZ	14.35	30.14	+110.03
			Total Cumulative Return Graham Nuggets	+98.49% return	S&P Index cumulative return Dec 10Th 2008 thru Mar 24Th 2010 899.24- 1167.72	+29.90% return

As you can see by the results that these portfolios based on Ben Graham and Value Investing techniques smashed the market returns. Keep in mind that these techniques may be more favorable during down markets or markets with much volatility.

* returns do not take into the account of any DIVIDENDS paid out

dividends add to total return

Author currently long SEB

Berkshires McLane Unit Buys Spirits Distributor Kahn

2010-03-22T15:30:00.000-07:00

Berkshire Hathaway ($BRKB) subsidiary McLane Co. which is a 32 billion supply chain services provider is buying Kahn Ventures LLC which owns Empire Distributors, a wholesale alcoholicbeverage distributor based in Atlanta Georgia with operations in Georgia and North Carolina. Buffett likes buying private family run businesses and this one seems to fit the bill. As of this writing the price of the deal was not disclosed. Here again Buffett buys another simple to understand business, nothing fancy. According to other wire services its noted that Buffett might be using this as a base for further ventures in this field.

Family run operation lead by Michael and David Kahn

Empire has been in business since 1940

According to industry analysts its the nation’s 15th largest beer and wine distributor.

Over 650 employees

Revenue of 350 million a year(2006) according to latest figures I can come by

They have eight facilities totaling over 850,000 square feet of operating space equipped with high-tech equipment, including bottle scanning and GPS routing, to help them operate efficiently.

Author currently long BRKB

The Oracle's Annual Letter To Shareholders

2010-02-27T13:57:00.000-08:00

Warren Buffett's annual letter to shareholders was released early yesterday morning. The annual letters are Buffett's way of communicating with his shareholders. Buffett has been writing these letters to shareholders for over fifty years. The letters dating back to 1977 can be found here at Berkshire Hathaway. If you have never read any of them, I highly recommend doing so. Buffett speaks in a simple mans English and not the typical wall street analytic jargon that one needs to decipher. Buffett used the past year or so to put more dollars to work, and that he did. Berkshire invested in Goldman Sachs preferred shares and General Electric preferred shares both netting a 10% yield. He recently consummated the deal to buy the rest of Burlington Northern Santa Fe shares that he didn't own. He further increased his stakes in the largest retailer WalMart ($WMT), the number two waste company Republic Waste ($RSG) along with his good buddy Bill Gates who happens to be the largest shareholder of Republic Waste. Buffett has been a busy man over the last year and a half and certainly in the media more.

Here are some recent articles on the Oracle of Omaha...

Berkshire reports higher Sanofi, Tesco stakes

Excerpts from Warren Buffett's annual letter

Berkshire Hathaway fine-tunes its holdings

Whitney Tilson: Berkshire Hathaway Is Bargain Of 80 Cents On A Dollar

Author currently long $BRKB and $RSG

Operating like Berkshire Hathaway: Alleghany Corporation

2010-02-27T13:13:00.000-08:00

While most eyes have been on Berkshire Hathaway ($BRKA), ($BRKB) lately and rightly so. Their are other companies that operate in a similar fashion to Berkshire one being Alleghany Corp. ($Y) . Alleghany is one of those companies that fly under the radar. Alleghany is an insurance company that takes the "float" (which is money that doesn't belong to the company, but are premiums taken in from policy holders and paid out to policy holders). Alleghany's principal business is insurance, however with the access to this float (or cash) they reinvest the money in other businesses, much like Berkshire does. Alleghany has over 60 publicly traded company's amongst its investment portfolio.

"Alleghany's objective is to create stockholder value through the ownership and management of a small group of operating businesses and investments, anchored by a core position in property and casualty insurance. Alleghany is managed by a select company staff which seeks out attractive investment opportunities, delegates responsibilities to competent and motivated managers, defines risk parameters, sets management goals for its operating businesses, ensures that managers are provided with incentives to meet these goals, and monitors their progress.

The operating businesses function in an entrepreneurial climate as quasi-autonomous enterprises.

Conservatism dominates Alleghany's management philosophy. Alleghany's philosophy shuns investment fads and fashions in favor of acquiring relatively few interests in basic financial and industrial enterprises that offer the potential to deliver long-term value to the investor."

An interesting fact is that these guys at Alleghany were in Burlington Northern Santa Fe long before Buffett & Co. They have since divested their shares in Burlington and now hold over $825 million in cash in which they can use for future investments. Also they have NO debt and have managed to weather the last couple years quite well. They like Buffett use book value as their yard stick and not the actual price of the stock. The stock ($Y) trades at a discount to its current book value of $306.71.

We shun investment fads and fashions in favor of acquiring relatively few interests in basic financial and industrial enterprises that offer the potential to deliver long—term value to the investor... Alleghany Corporation

Author currently long $Y

The Dhandho Investor Sells Ternium, Buys Capital Source!

2010-02-13T08:06:00.000-08:00

Mohnish Pabrai aka the Dhandho Investor just released his 13F-HR filings seen here. Pabrai exited out of all of his Ternium ($TX) position. He had this in his portfolio since August 2007 quarterly filing. Pabrai started a new position in Capital Source ($CSE). Pabrai usually has around 15-20 different stocks in the portfolio. As of his latest filing Potash Corp ($POT) and Teck Cominco look to be his two largest holdings.

Pabrai made somewhat of a name for himself between 1999 and 2007 when he racked up returns that far outpaced the market. But as 2008 rolled in, the Pabrai Funds rolled over with the market taking a pretty big hit. However over the last year the Pabrai funds have enjoyed a nice move up along with the market but well out pacing it.

Mohnish Pabrai runs a group of partnership funds based on Warren Buffett's original Buffett Partnership Fund which existed between 1956-1969.

Author currently has NO positions in the issues mentioned

Lampert's Sears Holdings Unlocking Some Value

2010-02-11T07:06:00.000-08:00

It Looks like Eddie Lampert is unlocking some of Sears Holdings ($SHLD) value. What value? For most onlookers Sears is nothing but a washed up retailer, playing second fiddle to the likes of WalMart ($WMT) and Target ($TGT). But too the value investor their is a different story. For those not familiar with Eddie Lampert, he is the acting CEO of Sears Holdings and a Hedge Fund manager with over 20 years of successful investing experience. When Lampert took hold of Sears via Kmart and merged the two earlier this decade most hailed Lampert as the stock climbed to new heights. But over the last few years in one of the worst economy's since the Great Depression most have grown impatient wondering when and what he will do.

The Value that I was referring to is the DieHard battery brand which is owned by Sears and was exclusively sold only through Sears outlets. However now Sears will start selling DieHard through other retailing outlets (read here). This gives Sears another channel which could equate to more dollars down the line. Remember that Sears holds other brands that could later be sold through other retailers. Brands such as Craftsman tools, Kenmore appliance, and Lands End.

Relevant Articles:

SEARS NOT JUST YOUR AVERAGE RETAILER!?$$$

Billionaire Eddie Lamperts Sears Has More Ideas In-store!

Slicing up Eddie Lamperts Pie!?$$$

Author long SHLD

Buffetts Latest Move!

2010-02-09T13:07:00.000-08:00

Warren Buffett's Berkshire Hathaway Inc subsidiary International Dairy Queen, the ice cream retailer is planning in 2010 to open its first stores in Egypt and Macau. Berkshire bought Dairy Queen in 1998. Buffett frequently snacks on DQ desserts followed by an ice cold Cherry Coke. Coca Cola (KO) is Buffetts largest publicly traded equity posistion.

Steak n Shake Holdings To Change Name?

2010-01-30T14:20:00.000-08:00

Well its been a little under two years that Sardar Biglari took over the stewardship of one of America's oldest hamburger joints, Steak n Shake ($SNS). Since then he has moved pretty swiftly in shoring up the business and converting it into a holding company. Steak n Shake is no longer just a restaurant but an investment holding company. Currently under their umbrella are Steak n Shake, Western Sizzlin, and an insurance company Fremont Michigan Insuracorp. The latest news is that they plan on changing the parent name from Steak n Shake to "Biglari Holdings" (BH) which will emphasize the holding company. This also is to take away some of the confusion. This will be voted on at the shareholder meeting April 8th 2010.

Author currently long SNS

Biglari's $300 Steak Burger?

2009-12-21T06:41:00.000-08:00

No the steakburgers are not really $300, actually you can get a double steakburger with fries for a very reasonable $4. The $300 price tag I'm referring to is the newly 1-20 reverse stock split. Starting Monday the 21st of December 2009 Steak n Shake will trade in the $250-$300 per share range. Steak n Shake just released their full year and fourth quarter results for 2009 earlier in the week which you can find here. In his annual letter to share holders Biglari points out that he will focus Steak n Shakes future growth through the purchase of other equities other than just the restaurant business. In a nut shell this is no longer just a hamburger chain but a investment holding company. As I mentioned in my last update that Steak n Shake ($SNS) has taken a 10% stake in Freemont Michigan Insuracorp ($FMMH) a small insurance company located in the town of Freemont, Michagan. Biglari will look for undervalued companies which he will purchase through his new investment vehicle Steak n Shake. As stated in his annual shareholder letter, they "aim to grow long-term cash flows, not reported earnings. Their view on reported earnings is that they are not real until converted to cash." Wall Street always focuses on earnings and this is what you often see in the media. In the long run a company must earn money however what should be focused on is the free cash flow. Earnings can be manipulated and often can show a distorted picture while cash flow is more transparent. It will be interesting to see the transformation take place over the coming quarters and next few years.

Relevant Articles:

Biglari Finding Value In Those Steakburgers

Steak n Shake Transforming Into Mini- Berkshire Hathaway

Author currently long SNS

Markel Corps Private Acquisitions

2009-12-02T13:45:00.000-08:00

Markel Corp. (MKL) which is a property and casualty insurance company that specializes in specialty insurance products such as wind and earthquake exposed commercial properties, high valued motorcycles, personal, watercrafts, even horse related risks is becoming more and more like Berkshire Hathaway(BRKA, BRKB) as time passes on. Yesterday Markel announced that it acquired Baltimore-based Ellicott Dredge Enterprises LLC which is a 124-year old maker of Dredges. Markel first stepped into the private equity arena almost 5 years ago buying a major stake in a bakery manufacturer. This is a practice that Warrren Buffett has been doing for over 40 years and is quite successful at it. By buying into private concerns Markel is able to get 80-100% of these smaller companies unlike their passive investments in larger holdings such as General Elecrtic(GE), Wal-Mart (WMT), and Carmax (KMX) . By buying majority stakes of these smaller companies Gayner is counting on double digit returns. As you see by the list below these are simple businesses to understand. It seems Tom Gayner who runs the investment arm of Markel adheres to the same practices as Buffett, which is buying businesses that are simple and that have good management already intact. You will notice that their are no high-tech, fashionable companies in this group.

Private acquisitions since 2005

Acquires majority stake in AMF Bakery Systems- Located in Richmond Virginia is the world's leading manufacturer of quality bakery equipment for high volume bakeries since 1915.

Acquires Parkland Ventures- which owns and operates mobile home parks around the country.

Acquires 40 percent stake in First Market Bank- First Market Bank was founded and is headquartered in Richmond and mostly owned by the Ukrop family who own a chain of super markets in central Virginia. Now celebrating its twelfth anniversary, the bank has grown to more than 300 employees and has a network of 39 full-service locations (including 25 in Ukrop's stores and 14 freestanding branches). It has more than $1 billion in deposits and offers a full range of retail and commercial products including mortgage, trust and investment services. Earlier in the year First Market announced a merger with Union Bankshares Corporation. When the merger is complete the combined organization will have 97 branch locations throughout Virginia with more than $4.0 billion in assets.

Acquires Panel Specialist- is a leading manufacturer of panels, partitions, wall systems, casework, furniture, and countertops. Their customers include project managers, architects, and builders within five specialized divisions with annual revenues are over 30 million dollars.

Acquires an unspecified majority interest in Baltimore- based Ellicott Dredge Enterprises LLC- located in Baltimore Maryland has designed and manufactured over 1500 dredges, more than any other manufacturer, and has served customers in over 8- countries. They market their products through two divisions. The Ellicott Division sells pre-engineered standard dredges primarily to the marine contracting and sand and gravel markets. Ellicott Dredge is the only dredge builder which designs and builds all key components of the dredging system- from winches to pumps, from excavators to spud carriages. This concept of single responsibility lies behind Ellicott's reputation for reliable and durable dredges. Because of this approach, many Ellicott dredges are still going strong after 50 years of steady service. Ellicott also built all of the dredges used in the original construction of the Panama Canal.

Markel has over a one hundred and ten publicly traded companies totaling 1.3 billion dollars in its investment portfolio.

A Smaller Version of Berkshire Hathaway: Markel Corporation

3 Mini Berkshire Hathaways???

*Author currently long BRKB, MKL

Steak n Shake Transforming Into Mini Berkshire Hathaway

2009-11-09T19:21:00.001-08:00

Sardar Biglari acting CEO of Steak n Shake has wasted no time in turning the company into a holding company much like Warren Buffett did with Berkshire Hathaway. Biglari is using Steak n Shakes $SNS free cash flow to buy a 9.9% steak in Fremont Michigan Insuracorp $FMMH. Fremont Michigan InsuraCorp, Inc. is a holding company owning all of the outstanding shares of Fremont Insurance Company. Fremont Insurance Company is a Michigan licensed property and casualty insurer operating exclusively in the State of Michigan and writing principally personal lines, commercial lines, farm and marine insurance policies through independent agents. They were founded in 1876 and have served Michigan policyholders for over 131 years. They market policies through approximately 175 independent insurance agencies. Fremont Insurance Company has a financial strength rating of “B++” (Good) by A.M. Best. Biglari had mentioned before he would like to get into the insurance arena if the right opportunity came along. Why an insurance business? The insurance business should add another stream of income and more free cash flow to acquire other businesses as they arise. Fremont has over 10 million in cash with no debt. Current book value is $23.63 per share. This looks like a good candidate for Biglari and company however I do not see Biglari being a passive investor in this investment. Could this be just an initial stake, soon to be a subsidiary of Biglari's Steak n Shake holding company? Time will tell. Take note that this is much like Buffett started out over 50 years ago and we no how that turned out.

Company/Symbol	Market Cap	Cash	Book Value p/share	Price p/share
Steak n Shake / $SNS	$348.3 mil	$37.8 mil	$10.02	$12.09
Fremont Mich Insuracorp / $FMMH	$37.4 mil	$10.5 mil	$23.63	$21.45

More Relevant Articles from these great sites:

"This tiny company could be the next Berkshire Hathaway" @ The Daily Crux

"Sardar Biglari Buys 9.9% Fremont Insuracorp" @ Street Capitalist

"Western Sizzlin Corp Completes Distribution of Special Dividend of Steak n Shake Shares" @ CNN Money

Author is currently long SNS

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The Great Iron Horse Burlington Northern's New Engineer: Warren Buffett

2009-11-04T08:04:00.001-08:00

Buffett gave us subtle hints almost 3 years ago when he stated he wanted to "bag an elephant", who new the elephant was a "Iron Horse" (a pseudonym for steam engine). Buffett has said in the past he was looking for a large deal, something that would move the needle- the needle being Berkshires enormous stock portfolio. Well Warren Buffett just bought Burlington Northern Santa Fe, that is the whole company. BNSF will now be under the Berkshire Hathaway umbrella with companies such as Geico, Dairy Queen, See's Candies, and Shaw Carpets (see the whole list here). This is by far the largest deal Buffett has ever done which totals a whopping 44 billion. Before this, Berkshire's biggest acquisition was the $16 billion stock purchase of reinsurance giant General Re, announced in 1998. Buffett, who has been building up his rail holdings for several years was in the headlines back in early 2007 when it was announced that he had taken positions in several of the major rail carriers. But why did he zero in on Burlington Northern. Here are some of the pieces to the puzzle:

1) it's a business (railroads) that easy to understand

2) it's has a high return on equity which is currently 15% for the trailing 12 months (last year it was 19%)

3) it's a business with a moat (has high barrier to entry) not just anyone can start a railroad company

4) it's had consistent earnings

5) it's very efficient way of moving goods

6) it's a play on coal and other commodities

7) it's throwing off lots of free cash flow

8) it has high-quality management (its track record speaks for itself)

Many people wondered why he had suddenly fallen in love with the sector. The simple answer is globalisation. With booming demand for commodities from the Far East and a hunger for cheap foreign goods in the West, the rail companies linking consumer and producer look appealing for the long haul. Buffett has said he realized a few years late that railroads were an appealing investment. As diesel prices rise, shipping by rail instead of truck becomes more attractive, and it would be extremely difficult for a competitor to build a new railroad. Continuing upward pressure of fuel costs make rail transport increasingly more competitive with the trucking fleet and shall prompt more wholesale purchasing within our own continent. The dominant trend is the demand for raw materials and machinery to fuel the construction booms in China and India. US rail firms transport grains and building and construction products for export; US exports to China. "I basically believe this country will prosper and more people will be moving more goods 10, 20, 30 years from now and the rails will benefit," Buffett told CNBC. It's also a bet on the future of another country -- China. China craves the coal and other raw materials that the U.S. produces. Those commodities fuel the great economic engine that is China, which is the factory to the world. U.S. coal and goods are shipped via rail to Pacific ports and then shipped to China. With his round-out purchase of Burlington Northern, Buffett thinks China will continue to be strong.

* Author is currently long BNI

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Steak N Shakes Flipping Burgers into $$$

2009-10-23T05:34:00.001-07:00

I have written about Sardar Biglari a few times since the start of the year. It appears more on Wall Street are taking notice of this fund manager. This article is from the Wall Street Journals news wire... Steak N Shake 'Already Flowing with Cash'.

Biglari runs a partnership much like the one Warren Buffett ran earlier in his career.

Biglari who started buying Steak N Shake shares a couple years ago is currently the largest shareholder. He is also the acting CEO. He is what you would call a share holder activist. Share holder activists are usually investors who usually take a large stake in a company and push for a turnaround, this is usually when the stock has performed poorly. Not always is this good for the small shareholder but in the case with biglari, his interests are in line with shareholders. As the article states Steak N Shake is already producing free cash flow. Trailing 12 months free cash flow is 35.9 million (see chart below). Biglari has stated before that he could use the cash to buy back shares which decreases the shares outstanding which would help boost the bottom line. He can also take the excess cash and put it to use in better performing businesses, much like buffett has done over the last half century.

Management Direction

"New management, during the fourth quarter of fiscal year 2008, enacted a change in strategic direction under which we began to operate in a manner designed to generate cash. Our long-term objective is to maximize intrinsic business value per share of the Company. (Intrinsic value is computed by taking all future cash flows into and out of the business and then discounting the resultant number at an appropriate interest rate.) Thus, our financial goal is to maximize free cash flow and return on invested capital. We regard capital allocation as immensely important to creating shareholder value. Steak n Shake is transforming into a holding company. Its basic premise is to reinvest cash generated from its operating subsidiaries into any investments with the objective of achieving high risk-adjusted returns. Pursuant to a resolution of the Company’s Board of Directors on June 17, 2009, all investment and other capital allocation decisions are made for the Company by Sardar Biglari, Chairman and Chief Executive Officer. "

Steak N Shake might sell burgers, fries and shakes, however one day they could very well be selling insurance. Biglari is also the largest shareholder of Western Sizzlin (WEST) which he plans on rolling into Steak N Shake which should take place in the coming months.

Free Cash Flow $Mil	2006	2007	2008	TTM
Cash from Operations	69.6	43.4	24.4	42.0
Cap Ex	(80.8)	(68.6)	(31.4)	(6.1)
Free Cash Flow	(11.3)	(25.2)	(7.0)	35.9

Author is currently long SNS

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A look at 5 Defensive Plays 1 Year Later!

2009-10-14T10:24:00.000-07:00

Here is a look at five defensive stocks I wrote about 1 year earlier and where they are now. The market was tanking but did not reach a bottom for another 5 months. Keep in mind that their are many fundamentals to look for when picking individual stocks, however I tried to kept it simple with just a few important ratios mentioned here.

1) The P/E ratio All five stocks mentioned at the time had a P/E ratio of under 18. Only three currently have P/E's under 18.

2) Return On Equity or REO All had REO's of 14% or better while four of these still do. The higher this figure the better. REO shows how well a company uses investment funds to generate earnings growth.

3) Dividend Yield All paid dividends, and all have increased their payouts since.

4) Debt to Equity Ratio This is a measure of a company's financial leverage. Debt/equity ratio is equal to long- term debt divided by common share holders' equity. Generally the lower this figure the better. Last year P&G had the highest D/E ratio in this group which was .52 today it stands at .33 .

These are the types of companies that the legendary investor Warren Buffett invests in. In fact Coca Cola (KO), Costco (COST), Johnson & Johnson (JNJ), and Proctor & Gamble (P

G) are a part of Buffett's holding company Berkshire Hathaway. The five stocks mentioned returned a combined 11.05% before dividends. If you add on the average annual dividend yield of 2.67% for these five companies over the past year you will get a 13.72% total return. You will notice that all five issues are companies that make products we use and consume everyday, which is another trait that Buffet looks for.

One year later three out of five still look reasonably priced, those being HRL, JNJ, and PG.

Author currently long JNJ.

Cash Flowing & Growing!

2009-10-13T08:28:00.000-07:00

Even though we have seen the markets rise over the last few months

and many investors/traders calling for a market correction somewhere near here.

These four companies have been passing on profits(through dividends)

to shareholders while growing their businesses. These stocks still look cheap by

their EV/EBITDA ratio of under 6 and low P/E multiples under 10.

Earnings and book value have both increased at double digit rates over the last five years. Two of these company's have tripled off their market lows but still look cheap.

Company	Symbol	Yield	Price as of 9/7/2009	P/E	EPS Gwth (5yr Hist)	Earnings Yield (EPS/Price Per Sh)	Book Value Gwth(5yr Avg)	Cash Flow Gwth (Cur vs.Prior TTM
Apogee Enterprises	APOG	2.2%	$14.69	8.6	60.60%	11.9%	13.2%	28%
Innophos Holdings	IPHS	3.4%	$19.80	2.4	81%	43%	32.2%	39%
Safety Insurance	SAFT	4.75%	$33.68	9.5	18.5%	10.6%	16.1%	20.3%
Tidewater	TDW	2.2%	$45.05	6.4	61%	15.8%	12.6%	30.6%

Apogee transforms plain glass to create distinctive solutions for

architects, building owners, contractors, picture framers and others. Our glass and aluminum window,store front and curtainwall

systems make commercial buildings look great, reduce energy consumption and protect against hurricanes and blasts. Apogee's glass also reduces fading and reflection for picture framing customers. We combine the expertise of our people to engineer glass and metal building façades, complete massive orders for skyscrapers on time, and manage complex window, curtainwall and storefront installation projects. We also provide glass that makes framed art and pictures look better, while helping framers improve profitability. Leaders in our markets, Apogee leverages the strengths of our products and people to deliver distinctive solutions.

*Here's what The Fools say A Top-rated building products companies

Innophos is a

leading producer of specialty grade

phosphate products for the Food, Pharmaceutical and Industrial market segments. Within these segments our products cover a broad range of applications including water, paper and metal treatment, agriculture, electronics, textiles, tablets, meat

preservation and detergents. For example, specialty phosphates act as flavor enhancers in beverages, leavening agents in baked goods and cleaning agents in toothpaste. With over a century of experience, Innophos and its predecessor companies have pioneered the processes whereby complex phosphates are derived from organic phosphate rock. Our products are produced to the highest standards of quality and consistency with most of our global production facilities operating to ISO 9002 and GMP accreditation. We also hold a number of key patents governing the manufacture and use of phosphates and continue to develop new and innovative phosphate based products to address specific customer applications.

*A Magic Formula Stock with a 5 Star Rati ng From The Fool

Safety Insurance is a leading provider of private passenger automobile insurance in Massachusetts. In addition to private passenger automobile insurance (which represented 71.7% of their direct written premiums in 2008), they offer a portfolio of property and casualty insurance products, including commercial automobile (13.2% of 2008 direct written premium), homeowners (11.6% of 2008 direct written premium), dwelling fire, umbrella and business owner policies. Operating primarily in Massachusetts through their insurance subsidiaries, Safety Insurance Company, Safety Indemnity Insurance Company, and Safety Property and Casualty Insurance Company,

they have established strong relationships with 827 independent insurance

agents in 969 locations throughout Massachusetts.

Tidewater through its subsidiaries, provides offshore supply vessels and marine support services to the offshore energy industry through the operation of fleet of offshore marine service vessels. It offers services to support various phases of offshore exploration, development, and production, including towing of and anchor handling of mobile drilling rigs and equipment; transporting supplies and personnel; and assisting in offshore construction activities.

*A Detailed Look On This Industry Leader

Author long APOG

Please note that Apogee came up in an earlier screening I did. 11 Small Cap Stocks Trading Near Book Value

Update On Thor Industries

2009-10-05T17:24:00.001-07:00

Thor Industries $THO is the world's largest manufacturer of recreation vehicles and a major builder of commercial buses. I first mentioned Thor back in January 2009 when it was trading at $13.50 per share. The stock was used as an example of a company that the seasoned value investor Walter Schloss might pick if he were still picking stocks on a professional basis. Schoss had a very impressive track record during his years managing money. He was also a part of Ben Graham's alumni.

The stock has had an impressive run this year. I believe the stock price has gotten a little ahead of itself. They just announced today that they were making a special one time payout of 50 cents per share on their dividend. This is in addition to their quarterly payout of 7 cents per share. This is probably why the stock price ran up today.

10 months ago this stock traded at around 1X book value, where as now it trades for 2.3 book. Management still holds a big stake in this company at 39%, which is a plus, and aligns them with shareholders. The company still has a nice cash cushion of over 328 million with NO debt and free cash flow. All good looking figures for any value investor on the lookout for a new business to allocate money in. In fact Warren Buffett bought a similar business Forest River back in 2005, it to had NO debt. It would not suprize me if Buffett or another company would come in and buy this company outright. While I still feel that this is a very well managed company and things are looking up, the margin of safety is not where it was 10 months ago.

*Author does not currently have position in $THO

Posted via email from stockmanmarc's posterous

Versar involved in $3 billion Air Force contract

2009-09-30T11:32:00.000-07:00

Versar among 16 companies receiving $3 billion contract for environmental work; shares soar

Government contractor Versar Inc. said Wednesday it is one of 16 small businesses that received a $3 billion five year Air Force contract for environmental and other work.

The contract by the Air Force's center for engineering and the environment, which includes an eight-year performance period, calls for environmental restoration services, construction and services in support of the Military Munitions Response Program.

*11 Small Cap Stocks Trading Near Book Value

Two Under Valued Companies Trading at Their Cash Value

2009-09-29T13:16:00.000-07:00

Without getting into the current Healthcare Reform issues. Here are two managed-care companies Humana Inc. and Molina Healthcare that are now selling for what they currently have in cash. Humana has nearly doubled off its march low while Molina is only up about 30 percent. Both have current ratio's above the 1.5 ratio, which is a measure of a company's ability to pay back short- term debt with its short term assets. A ratio of under 1 shows that they might be hard pressed to pay off any monies owed if it were due at that point. Molina is currently trading at 1x book value while Humana has a book value ratio of 1.28. Molina has increased its book value almost 5.5x since 2002

while Humana has increased theirs 3x which is a key measure that Warren Buffett looks for.Both seem to be consistent free cash flow generators another key measure that most value investors look for. Income investors might want to look elsewhere due to the fact that neither company pays a dividend.

Company	Symbol	Cash/share	Price as of 9/28/2009	Book value/share	Current ratio	P/E ratio	Market cap
Humana	HUM	$36.57	$38.03	$29.82	1.62	7.5	6.3b
Molina Healthcare	MOH	$21.59	$20.97	$20.94	1.88	9.4	537m

*The Molina family along with other insiders hold 51% of the stock. Currently 20% of the float is being shorted.

*Value Investor Bruce Berkowitz of The Fairholme Fund ($FAIRX) owns 9.5 million shares of Humana which represents a top ten holding for the fund.

Spot Light On A Small Cap Stock

2009-09-22T10:24:00.001-07:00

Vicon Industries $VII Industries is an industry-leading designer, manufacturer and marketer of video systems and components used for security, surveillance, safety and control purposes. Celebrating over 40 years in business, the company is unrivalled in experience developing video surveillance technologies. Vicon systems are employed worldwide in high-profile, enterprise-scale installations by a diverse range of customers, including governments, Fortune 500 companies, private and public institutions, and global transit and commerce hubs.

Vicon currently trades at 4x current free cash flow with a Book Value of 7.6. Currently the stock is trading at $5.85 per share. Management has a 39% stake in the business. It also has a earnings yield of 11.24% which is double the S&P 500’s earnings yield of 5.29%. Recently the company was named to Fortune Magazine’s 2009 Fastest Growing Small Public Companies.

Posted via email from stockmanmarc's posterous

11 Small Cap Stocks Trading Near Book Value

2009-09-22T08:16:00.000-07:00

Benjamin Graham considered the father of security analysis and value investing used a set of tools to pick stocks. These tools much like a carpenter uses to build or fix a house, Graham used to find undervalued stocks. His tools were low P/E ratios, stocks that traded near book value, stocks that made money over the past 5 years, and stocks that showed consistency of paying a dividend. Here is a list of 11 small cap companies trading near their book value. Most of these companies have several characteristics that a Value Investor such as Graham would be looking for. All trade at a low P/E ratio with earnings growth over the last five years. All but one pay a dividend. Six of these issues have paid out a dividend for 10 straight years.

American Physicians Capital- founded in 1975 through its subsidiaries, is a regional provider of medical professional liability insurance focused primarily in the Midwest, with Michigan, Illinois, Ohio, Kentucky, and New Mexico as our core states. Based on direct written premiums as reported by A.M. Best Company, we are among the top writers of professional liability in Michigan, New Mexico and Illinois. We rank 19th nationally among professional liability insurers, with approximately 9,300 policies in-force.

Apogee Enterprises- founded in 1949 and is based in Minneapolis, Minnesota transforms plain glass to create distinctive solutions for architects, building owners, contractors, picture framers and others. Our glass and aluminum window, storefront and curtainwall systems make commercial buildings look great, reduce energy consumption and protect against hurricanes and blasts. Apogee's glass also reduces fading and reflection for picture framing customers.

Chase Corporation- founded in 1946 and is headquartered in Bridgewater, Massachusetts engages in the manufacture of specialty tapes, laminates, sealants, and coatings, as well as in the provision of contract assembly services for the electronics industry worldwide.

Espey Mfg. & Electronics Corp.- founded in 1928 and is based in Saratoga Springs, New York engages in the development, design, production, and sale of electronic power supplies, various transformers and iron-core components, and electronic system components primarily in the United States.

Friedman Industries- founded in 1965 and is based in Houston, Texas. Together with its subsidiaries, engages in steel processing, pipe manufacturing and processing, and steel and pipe distribution in the United States.

Oil Dri Corp. of America - founded in 1941 is a leading developer, manufacturer and marketer of products for consumer, industrial and automotive, agricultural, sports fields and fluids purification markets. Oil-Dri -- Creating Value From Sorbent Minerals

Preformed Line Products Company- founded in 1947 and is headquartered in Mayfield Village, Ohio. Together with its subsidiaries, designs and manufactures products and systems employed in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators, and information industries worldwide.

Patterson-UTI Energy- founded in 1978 provides onshore contract drilling services to exploration and production companies in North America. The Company has approximately 350 marketable land-based drilling rigs that operate primarily in oil and natural gas producing regions of Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Alabama, Colorado, Arizona, Utah, Wyoming, Montana, North Dakota, South Dakota, Pennsylvania, West Virginia and western Canada. Patterson-UTI Energy, Inc. is also engaged in the businesses of pressure pumping services and drilling and completion fluid services.

Servotronics- founded in 1959 engages in the design, development, and manufacture of high quality components, systems and sub-systems for use wherever precise control, reliability and cost containment are primary requirements.

The Stephan Co.- founded in 1897 and is headquartered in Fort Lauderdale, Florida together with its subsidiaries, engages in the manufacture, sale, and distribution of hair care and personal care products.

Versar- founded in 1969 and based in Springfield, Virginia provides various professional services to the government and private sector with solutions for infrastructure, facilities management, construction, environmental quality, defense, and homeland security needs in the United States and internationally.

Ticker	Price as of 9/18/2009	Book Value	Price Book Ratio	Free Cash Flow	P/E	Current Ratio	Mkt Cap	Total Debt	Earnings Growth Past 5 yrs	Yield %	Industry
ACAP	29.54	22.37	1.37	40.9m	8.54	4.92	313.4m	25.9m	24.3	1.1	Property & Casualty
APOG	15.94	11.51	1.35	31.2m	8.94	1.63	444.8m	8.4m	31.4	2.2	General Building Material
CCF	11.6	7.86	1.46	12m	13.57	3.04	99.1m	0	7.8	3.1	Industrial Equipment & Components
ESP	18.1	13.44	1.37	4.7m	14.23	13.3	38.2m	0	53	5.1	Diversified Electronics
FRD	6.15	8,2	.75	3.8m	4.38	9.48	41.8m	54,030	16.27	0.6	Steel & Iron
ODC	14.31	12.93	1.14	5m	11.23	2.92	101.1m	21.5m	12.71	4	Specialty Chemicals
PLPC	39.50	28.19	1.40	5m	13.48	3.07	206.8m	7.8m	11.4	2	Heavy Construction
PTEN	15.04	13.81	1.11	168.6m	12.45	2.05	2.3b	0	11.8	1.3	Oil & Gas Drilling & Exploration
SVT	7.20	9.63	.78	2m	6.32	4.92	13.9m	4.1m	38.15	2	Industrial Electrical Equipment
TSC	2.42	5.51	.46	2.1m	13.97	6.61	10.3m	426,000	22.13	3.3	Personal Products
VSR	4.04	3.06	1.21	5.0m	11.67	2.73	36.8m	0	23.56	0	Technical Services

Update on Steak n Shake!

2009-09-17T10:43:00.000-07:00

Sardar Biglari, CEO of Steak n Shake continues to whittle down the debt while increasing free cash flows. The stock has made a nice move over the last couple weeks. Biglari has added to his stake by purchasing an additional $4,000,000 dollars worth. Traders may want to give this Value play a look, it is trading near its 12 month high.

Links to recent articles: Biglari & Co. Find Value In Those Famous Steakburgers, Biglari: The Young Buffett, Market Report- In Play SNS

10 Small Caps with High "Insider Ownership"

2009-09-15T12:22:00.001-07:00

All 10 stocks mentioned below offer double digit rates of return on equity as well as assets. ROE is a corporations measurement of how profitable the company is with the money shareholders have invested. ROA shows how efficient management is at using its assets to generate earnings. All ten are trading at reasonable P/E ratios. All 10 mentioned have current ratios above 1.9, any thing above 1.5 shows that the company is capable at paying back short term debt. All 10 have a large inside ownership with modest to low debt and free cash flow, with each paying a dividend.

Company	Symbol	Price$ as of 9/14/09	P/E Ratio	ROE%	ROA%	Market Cap	Free Cash Flow	Inside Ownership %	Current Ratio
AAON, Inc.	AAON	20.31	12.5	29%	18%	349 mil	20 mil	27%	2.1
Advance America	AEA	5.67	9.6	20%	11%	358 mil	168 mil	31%	5.2
Alliance Holdings	AHGP	20.16	11.9	38%	11%	1.2 bil	122 mil	79%	2.1
Alliance Resource	ARLP	35	11.3	52%	11%	1.3 bil	71 mil	44%	2.1
Buckle	BKE	28.54	11.5	30%	23%	1.3 bil	94 mil	44%	3.7
BreitBurn Energy	BBEP	10.95	.92	65%	21%	593 mil	37 mil	42%	1.95
Cal-Maine Foods	CALM	28.39	8.5	26%	14%	659 mil	113 mil	39%	2.3
Lancaster Colony	LANC	50.56	15.9	23%	16%	1.4 bil	64 mil	35%	2.9
Newmarket Corp	NEU	88.65	14.2	27%	12%	1.3 bil	42 mil	23%	2.8
Terra Nit	TNH	106	10	128%	63%	1.9 bil	375 mil	75%	5

* Deep Value Investor Seth Klarman of The Baupost Group holds 8.49 million shares of BreitBurn Energy which accounts for over 16% of the stock.

A Look at The Big 3: Medical Stocks

2009-09-10T18:21:00.000-07:00

Pharmaceutical distribution in the United States is dominated by three firms: Cardinal Health CAH, McKesson MCK, and AmerisourceBergen ABC. AmerisourceBergen is the purest play on this narrow-moat industry. However when siphoning through the numbers one sees their is a big contrast in their stock valuations. Without getting into the Presidents medical proposals, one needs to focus on the value of the individual businesses themselves. All three are trading at reasonable valuations, but digging into the numbers a little deeper, Cardinal Health is clearly the cheaper stock. Cardinal is trading near its book value, while the other two are over 2x book value. Cardinal also offers a much more attractive dividend yield. Cardinal's P/E ratio is currently half the industry average. While all three hold a bright outlook going forward Cardinal seems to have a margin of safety already built into its share price. This is not to say that its stock price could not fall from current levels but that it is trading at a cheaper valuation than the other two companies. With the aging of the population in the United States their is still much upside in this industry and Cardinal offers you a dividend while you wait.

AmerisourceBergen Corporation, a pharmaceutical services company, offers drug distribution and related services to health care providers and pharmaceutical manufacturers in the United States, the United Kingdom, and Canada. It distributes brand name and generic pharmaceuticals, over-the-counter health care products, home health care supplies and equipment, and related services to health care providers, such as acute care hospitals and health systems, independent and chain retail pharmacies, mail order facilities, physicians, medical clinics, and long-term care and other alternate site pharmacies.

Cardinal Health, Inc. provides health care products and services primarily in the United States. The company’s Health care Supply Chain Services segment distributes branded, private-label medical and laboratory, generic pharmaceutical, health care, and consumer products to retail customers, hospitals, and alternate care providers. It provides distribution, inventory management, data/reporting, new product launch support and contract, and charge back administration services, as well as operates a pharmaceutical repackaging and distribution program that offers repackaged pharmaceutical products.

McKesson Corporation, together with its subsidiaries, provides supply, information, and care management products and services for the health care industry. It operates through two segments, Distribution Solutions and Technology Solutions. The Distribution Solutions segment distributes ethical and proprietary drugs, medical-surgical supplies and equipment, and health and beauty care products in North America. This segment also provides specialty pharmaceutical solutions for biotech and pharmaceutical manufacturers; sells pharmacy software; and provides consulting and outsourcing services. The Technology Solutions segment provides enterprise-wide clinical, patient care, financial, supply chain, and strategic management software solutions; pharmacy automation for hospitals; and connectivity and outsourcing services.

Company Name	Symbol	Price (9/9/09)	P/B Ratio	Revenue (end June 30th)	Mkt Cap	P/E Ratio (TTM)	Dividend Yield	Debt/Equity Ratio
AmerisourceBergen	ABC	21.43	2.3	70.2b	6.39b	13.3	1.10%	.43
Cardinal Health	CAH	26.83	1.1	99.5b	9.36b	8.5	2.70%	.38
Mckesson	MCK	57.25	2.4	106.5b	15.18b	18.1	.90%	.37

4 Stocks With Rising Dividend$

2009-09-09T12:56:00.000-07:00

Below is a screen I ran this morning on dividend stocks. This screen seeks to identify quality companies that have a history of good dividend growth and that also have an additional kicker: their shares are sporting above-average yields. All four are ranked A or better by Standard & Poor's Investor service. All four have grown their dividends at double digits over the last 5 years.

The Strategy for owning/investing in dividend stocks

Cash dividends are tangible. They can't be fabricated, or falsified, or manipulated. Over time, dividends are a true record of a company's performance. They can also represent a significant proportion of an investment's total return. Since 1926, dividends have accounted for almost 42% of the total return (capital appreciation plus reinvested dividends) of the S&P 500. The attraction of a safe, secure dividend, moreover, will help to support and cushion a stock when the market is going through bad times and is under downward pressure.

Company Name	Ticker Symbol	S&P Rank (earnings/div. rank)	Dividend Yield	Dividend Growth Rate(5 yr avg)	Trailing P/E	Current Ratio
VF Corp	VFC	A	3.4%	17.81%	14.9	2.3
Johnson & Johnson	JNJ	A+	3.24%	11.45%	13.4	1.8
Sysco Corp	SYY	A+	3.72%	13.05%	14.5	1.7
Emerson Elec Co	EMR	A	3.47%	10.53%	15.6	1.5

Your Garbage Can Pay You Dividends

2009-09-03T09:52:00.001-07:00

First Posted On Our Sister Site @ HighYieldingDividends

Who said their wasn’t money in trash. Well these three companies pass their profits to share holders. Listed below are three companies that are in the waste management industry. Two large caps and one small cap. All three pay a nice dividend. One well known tycoon has a significant stake in Republic Services.

Waste Management, Inc. - was founded in 1894 and is based in Houston, Texas. Waste Management (WM) is the leading provider of comprehensive waste management and environmental services in North America. As of December 31, 2008, the company served nearly 20 million municipal, commercial, industrial and residential customers through a network of 367 collection operations, 355 transfer stations, 273 active landfill disposal sites, 16 waste-to-energy plants, 104 recycling plants, and 111 beneficial-use landfill gas projects.

Republic Services, Inc. - was founded in 1996 and is headquartered in Phoenix, Arizona. Republic Services (RSG) is a leading provider of solid waste collection, transfer, recycling and disposal services. We operate 400 collection companies in 40 states and Puerto Rico and provide top quality services to commercial, industrial, municipal and residential customers. Republic serves millions of residential customers under contracts with more than 3,000 municipalities for waste collection and residential services.

American Ecology Corporation - was founded in 1952 and is headquartered in Boise, Idaho. American Ecology (ECOL) is one of the nation’s oldest providers of radioactive and hazardous waste services. The company accepts hazardous and low-level radioactive waste from commercial and government entities, such as refineries and chemical production facilities, manufacturers, electric utilities, steel mills, and medical and academic institutions. American owns one commercial nuclear waste disposal site and three hazardous waste sites in the United States.

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*William (Bill) H. Gates is chairman of Microsoft Corporation, the worldwide leader in software, services and solutions that help people and businesses realize their full potential. Mr. Gates owns 15% of the common shares through his investment vehicle Cascade Investment LLC and The Gates Foundation.

*Mr. Heil is a land developer and private investor, and has owned and operated one of the largest solid waste landfills in the mid western United States. Mr. Heil has more than 40 years experience in the construction and waste service industries and has, since 2002, served as President of E.F. Heil, LLC, operator of a landfill in Plainfield, Illinois. Mr. Heil is a director of American Ecology and the largest individual share holder in the company owning close to 6%of the common stock.