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| BUY | | Microsoft | MSFT-Q | 27.840 | Have such a fantastic core business that anything acquired is dilutive. The core Windows and Office Franchise continues to generate well over $1 billion in free cash flow every month. Have over $30 billion on the cash sheet waiting to be deployed. Trades at it free cash flow yield of close to 8%. | 2008-08-22 | |
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| HOLD | | Apple | AAPL-Q | 176.790 | High-quality company. Good products giving them a good competitive position. FMV is only 10% higher than the current stock price. Would consider buying a little lower down. | 2008-08-22 | |
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| DON'T BUY | | Lehman Brothers Holdings | LEH-N | 14.410 | Not a stock for investors. Strictly for gamblers. In a position of duress at the moment. Thin slice of equity sitting on a very large trading book. This is endemic across the entire investment bank sector. | 2008-08-22 | |
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| DON'T BUY | | Visa Inc. | V-N | 74.090 | A top-shelf company. A financial stock that takes no credit risk and is benefiting from this shift of going from cash to plastic. The organic growth is very robust. Strong competitive position. Valuation is not quite as interesting as it is only slightly undervalued. | 2008-08-22 | |
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| BUY | | Ultra Petroleum Corp. | UPL-N | 65.650 | Very interesting natural gas company focused in Wyoming. Has the highest return on investment capital and highest organic growth rate in their sector. | 2008-08-22 | |
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| BUY | | General Electric | GE-N | 29.120 | Fair value estimate is $40. High quality, relatively low risk. | 2008-08-22 | |
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| BUY | | Pfizer Inc | PFE-N | 19.750 | Worth considering at this price. Very cheap. Double-digit free cash flow yield and very attractive dividend yield. Lipitor will be coming off patent and pipeline of new drugs is relatively thin. Will be lucky to have 0% growth over the next 5 years but over the very long term they will get the pipeline filled. | 2008-08-22 | |
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| HOLD | | Costco Wholesale | COST-Q | 67.430 | Fantastically positioned. Perhaps the best of the warehouse stores in the US. Performing quite well. | 2008-08-22 | |
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| TOP PICK | | Cemex SA | CX-N | 20.620 | Incredibly cheap. On track to generate roughly $3 billion in free cash flow this year. That equates to nearly 20% of the current stock price. Strong competitive position. | 2008-08-22 | |
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| TOP PICK | | eBay Inc | EBAY-Q | 25.030 | Things have been slowing down but they are switching up their fee structure. Very inexpensive. Roughly $4 a share in cash and no debt. Trading at a free cash yield of 6%. Growing at near 20% year-over-year. | 2008-08-22 | |
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| TOP PICK | | Lowes Companies Inc. | LOW-N | 24.860 | Negative same-store sales. Just reported earnings and year-over-year they are off only a couple of pennies. Will be earning roughly $1.50 a share this year. | 2008-08-22 | |
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