Issue 3: Small/Mid

This took much longer than expected. The natural gas companies are quite difficult to find a price you’d be interested to pay based on historical earning power; gas prices change and historical conditions are in no way tied to future output. One I couldn’t believe was FerrellGas Partners (FGP). They set their dividend at $2 per share each year since 2002 and they don’t even earn that much each year. Therefore, to continue paying this dividend, they have taken on an enormous debt load with little chance of repayment and have diluted shareholders a significant amount… such a terrible situation. They get the “bonehead award” of the day. In addition, I’m not familiar at all with the economics behind wireless networking (it all looks like star wars to me), so those took me some time. However, I did enjoy the specialty chemical companies and there are a few hidden gems in that industry. As usual, I will list companies potentially at a discount:

  • HKN Inc.
  • Penn Virginia Corp.

And those which possess superior economics as great businesses:

  • National Research Corp.
  • HMS Holdings
  • Balchem Corp.

And with that, I’ve officially finished Value Line, both the small/midcap and the standard edition. It’s been a long haul & I enjoyed it- quite a great learning experience. I’ll be moving into freelance research the way I was back about two months ago (with things such as H&R Block & Buckle). My latest project is ContinuCare (CNU). It’s quite an interesting business and I’m enjoying what I’m reading.

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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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