 Benjamin Graham often wrote of distinguishing the difference between investing and speculating. Fannie Mae, in its current state, sits in the speculating bucket. Investing has to fun though, sometimes it is interesting to window shop, so lets look.
Evaluation based on Buffet’s Criteria
When looking at a business I often ask myself what other investors would think? So lets apply Buffett’s criteria and see if we can’t look at it through his eyes.
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 This article originally appeared on The DIV-Net May 15 2009.
This week we are reviewing Bristol-Myers Squibb as a possible stock acquisition. To do so we will use the Buffett four filters we discussed in a previous article.
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 Over Christmas I analyzed Ford’s financial statements from the previous years and decided that the current $1.60 / share it was trading at was under its intrinsic value. A stock price I had anticipated some time earlier see the post. I invested and set a target sell price of $4.50-5.50. The stock has risen impressively since then and I have been patiently awaiting the $5.50 target.
Recently I received my shareholder’s proxy voting ballot, I’ve seen a few of these through the years with different companies, usually pretty uneventful but honestly I was a bit surprised by a few of the items we were voting on and how the board was recommending we vote:
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 On Friday February 7th Puget Power announced the closing of the sale of its core business at $30 per share. Regular readers of my blog will recall that I recommended a purchase of PSD in November of last year at $18. If one includes the $.25 dividend payment from Jan 16th, and the pro rata dividend of $.04 this transaction returns $30.29, or a profit of an impressive 68%.
While I am very happy to have a 68% win on a 3 month investment (and hope several of you are also counting your fortunes this weekend) I think this is a good time to turn around and look at the trade again to see if it was a wise trade or a bit of wisdom and a bit of luck.
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 Vancouver is currently preparing for the 2010 Winter Olympics. As part of the Olympics Vancouver is constructing a residences for athletes. The city had planned to see the residence sold off as condos after the Olympics for a healthy profit. With the credit crunch and the downturn in housing in Vancouver though the story is changing. To boil it down, basically Fortress Investment Group was loaning the money to complete the work on the site and has now stepped back and stopped funding the project, leaving the city of Vancouver in the lurch.
Wherever there is money it is worthwhile to ask; is there a opportunity here for investors?
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 Originally published on: Div-Net
After much searching I found a stock screener for Canadian stocks (more on this in another post). I was able to assemble a Graham style screener with the following criteria:
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- Exchange TSX
- P/E less than 15
- Dividend Yield > 3.5
- Average EPS > 33%
- Revenue > $550M
- Current Ratio > 2
- Price/Book Ratio less than 1.5
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What I paid for it:
Still looking thanks!
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What I like about it:
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- I love to see recent insider buying. People sell stock for all sorts of reasons, but only buy stock for one reason:
- Low, low, low P/E 0.42, industry at 7.42 (did I read that right… yup ya did).
- Price to book 0.61, industry at 1.4.
- Current Ratio 2.19, industry at 0.92.
- Annual EPS growth at 77, industry at 4.16.
- 5 yr Dividend Growth rate 77.79.
- Market Cap 470M
- Low low price to sales ratio 0.12, industry .23
- 95% institutional ownership, they are running the long race here.
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What I paid for it
$18.00
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What I like about it:
- Fair insulation from credit problems, and recession.
- Good dividend yield at 4.1% (distribution Dec 1).
- Company due to be purchased at $30 pending one final approval (this is the big one).
What I don’t like about it:
- P/E higher than industry, sector, and S&P.
- Price to Sales higher than industry, sector, and S&P.
- Doesn’t really meet any of my traditional Graham investing rules.
- One should never buy into litigation.
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