Issue 2 had some interesting industries and I particularly like reading about restaurants, railroads, and maritime shipping. As should be expected, all the airlines are terrible and the waste management companies are not particularly profitable. I cannot point at any particularly distressed industries, other than perhaps maritime shipping, but their pricing power is so erratic that they are oftentimes more difficult to value than just about any other companies.
Great Businesses in this Issue:
- Canadian National Railway
- Darden Restaurants (Red Lobster, Olive Garden)
- Dun & Bradstreet
- Equifax Inc
- Factsheet Research Systems
- Moody’s Corp- it WAS great, future is unclear
- P. F. Chang’s
- Panera Bread Co
- Papa John’s
- Rollins Inc (Orkin Exterminating)
- Tim Hortons
- Yum! Brands (Taco Bell, KFC, Pizza Hut, A&W)
Again, unfortunately, none of these companies are at prices I would be willing to do more research on. Mr. Market is just too optimistic these days… However, there are two mediocre companies at interesting prices. I am not sure exactly about the quality of the two, however I will start research on both now.
- Genco Shipping
- Jack in the Box
I studied the dry bulk shipping industry in-depth this summer, and from knowing the pricing power on these shippers, it is very difficult to get excited. The industry is characterized by constant uncertainty, high debt loads, and dilution of stock. Genco seems to not be diluting their stock other than by management compensation and their debt is at relatively manageable levels. Jack in the Box owns Qdoba and has been hurt the last 2 years by the recession. The stock has been punished and I am curious at today’s prices. That would be 2 out of 137 companies. I had 0 interesting situations last issue. I would take that to mean that the overall stock market is overpriced on average.