Issue 3

As I said before, I would go through Issue 3 to look over the various energy companies.  There were very few I was truly interested in, although it was interesting to see that most of the energy companies had negative working capital.  Energy companies seem to have relatively lower returns on assets and higher margins than most industries, but those margins fluctuate with energy prices and it is difficult to project forward.

Great Businesses in this Issue:

  • Canadian Energy Natural Resources
  • Ecolab Inc
  • International Flavors & Fragrance

There were no interesting situations in this issue- the closest to an good price for me was Sunoco.  It has been in a very competitive industry and has had some trouble in recent years.  I do not plan on investing, but I am looking at various refiners right now to learn about how their business model works.  Also, the gigantic “oil majors” (Exxon, Petrobras, Shell, etc…) are at very low prices for what you would be buying.  I can find more value elsewhere in the less-covered businesses in the market, but for those large mutual funds, I’d be disappointed if they didn’t have large holdings in some of these oil majors.

I’m almost done with Issue 12- i’ll have it posted soon.  Although it may seem that I am all over the place with these issues, I started this blog after having finished half of the VL issues.  I’ll update my valuations every 6 months, so after Issue 12, I won’t have any more large-cap VL issues, although I will start with the small/midcaps to go through the less-covered, smaller companies.  I already finished issue 4 of this, but I don’t want to post anything until I’m done with the large companies.


About Andrew Schneck

I am a value investor focused on misunderstood securities and industries, with an eye for long-term stock ownership.
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