Comments on: 3 Value Stock Ideas

By: Michael

Michael — Sat, 08 Aug 2009 02:45:29 +0000

I’ve been following American Railcar for awhile and have briefly owned shares earlier. In their conference call yesterday, they disclosed some fairly significant exposure and reliance on CIT. Other than that, there are 3 things I like about it:

1)Amount of cash
2)Icahn Stake
3)We’re basically at the bottom of the cycle (likely best value)
.-= Michael´s last blog ..Fuel Systems Solutions Earnings Strong =-.

By: Jae Jun

Jae Jun — Wed, 05 Aug 2009 04:41:12 +0000

Not sure whether it was articulate but I’ll take it. Thanks Todd

By: Todd

Todd — Wed, 05 Aug 2009 00:31:13 +0000

Jae – terrific article. Very articulate and very Grahamish. Todd

By: KenC

KenC — Tue, 04 Aug 2009 20:58:46 +0000

Carl Icahn is Chairman of the Board as well, his son Brett is one of the directors.
.-= KenC´s last blog ..Online investing research tools =-.

By: Jae Jun

Jae Jun — Tue, 04 Aug 2009 17:33:04 +0000

Hi Saji,

Once a company gets bigger, it will most likely grow at a rate equal to how much returns it can make off its investment.
I.e. over time, CROIC and FCF growth should converge. I don’t just use the CROIC as the growth rate but rather look at other factors such as FCF growth, earnings growth, margins, PE etc to determine what a fair growth rate would be.

But as a rule of thumb, I prefer not to use a growth rate of over 15%.

By: Jae Jun

Jae Jun — Tue, 04 Aug 2009 17:02:56 +0000

Seems like I made an error in the date range and cropping of the image. Will update the image with the correct range.

By: Saji

Saji — Tue, 04 Aug 2009 15:21:41 +0000

Hi Jea,
I have been following you blog for quite some time. I have learned a lot from you post. I have a question.

Do you think it is wise to use the CROIC or for that matter an average of CROIC of the last 10 yr, as the companies growth rate while calculating the DCF?

-Saji