Pier 1 Imports (PIR) NYSE

Pier 1 Imports (PIR) NYSE Purchased on 8/24/2004 at $17.75

OK, this was not my idea but I like nonetheless. I came across this company after reading about two investors who have been loading up on the company. Warren E. Buffett and Scott Black have loaded up on this stock. After looking at PIR and comparing the company to its peers, I can see why the value is so compelling.


---------------------Market Cap------ P/E------------- ROE %----- Div. Yield %----- Debt to Equity------ Price to Book
Retail (Specialty) ------212.50B-------- 41.609---- 14.703------- 1.196-------------- 0.514--------------- 5.782

Pier 1 Imports, Inc. ------1.54B--------- 14.551---- 16.777------- 2.266------------- 0.028---------------- 2.3

Analysts have a 2005 EPS estimate between $1.18 and $1.42 with an avg. of $1.33. A simple calculation puts PIR at about $50 a share based on the industry avg. I know that sounds simple but is a valid metric. True, PIR has to beef up there top line growth rate but they are certainly making an effort.

"Despite record sales of nearly $1.9 billion, the specialty retailer saw its per-share earnings slip 5% in the fiscal year that ended in February. As a result, Pier 1 Chairman and CEO Marvin Girouard says, "we will be evaluating all aspects of the company" -- from its merchandising practices to its advertising and marketing programs. " from the Dallas Business Journal

There is definitely value here. The question is whether management can right the ship and grow the earnings multiple. Stay tuned...

Enterprise Prod. Part. (EPD) NYSE

Enterprise Product Partners (EPD) NYSE - Purchased on 8/5/04 for $20.29.

Enterprise Products Partners L.P. (Enterprise) is a midstream energy company serving producers and consumers of natural gas and natural gas liquids (NGLs). The Company conducts all of its business through its wholly owned subsidiary, Enterprise Products Operating L.P. and its subsidiaries and joint ventures. The Company has five business segments: Pipelines, Fractionation, Processing, Octane Enhancement and Other. Pipelines consists of NGL, petrochemical and natural gas pipeline systems, storage and import/export terminal services. Fractionation primarily includes NGL fractionation, isomerization and propylene fractionation. Processing includes Enterprise's natural gas processing business and related NGL marketing activities. Octane Enhancement represents the Company's investment in a facility that produces motor gasoline additives to enhance octane. The Other business segment consists of fee-based marketing services and various operational support activities.

Most people buy MLPs for the yield and long term prospects. MLPs aren't good trading vehicles becuase they aren't very volatile and because of their high dividends/distributions it's very expensive to maintain a short position.

Where are we in the current economic cycle?

Steel and oil stocks are the leaders in this current market. Can we assume that we are at a certain point in the current economic expansion because these two industries are waxing? It is more complicated than that. Oil is being impacted by the conflict in the Middle East (and Venezuela perhaps). China is also creating a large demand for oil, which is a somewhat new factor. Oil producing countries are always turning their spigots off and on. They manually create the supply, demand is going up though. So I think we should expect to see higher oil prices in the future. If oil hits $60. A barrel, the US could go into recession.

Steel stocks. Why are steel stocks leading the market? The domestic steel market is being affected by six factors.

1. An exponential increase in steel production in.... You guessed it. China.
2. The overall improvement in the US economy and in manufacturing.
3. Raw materials in steelmaking. Coal, coke, scrap, iron ore and certain alloys. Raw material costs have skyrocketed to the point where the steel producers must increase base prices.
4. Coal supply has being impacted by two fires. One in West Virginia and one in China.
5. The energy costs that it takes to make steel have increased.
6. Shipping costs have increased.

Has the bloodletting stopped?

The last couple of days have been hard to endure, if you are invested in equities. The price of oil and the weak job growth in July has spooked investors. Oil is at $45 a barrel. I predict that oil continues to rise until the election. If the Middle East can keep oil prices high, the US economy will drag, the Market will continue its sell off. This in turn could ruin President Bush's re-election. Just an idea. Venezuela is a wild card as well. Who knows what will happen there and the country's oil production after Sunday's recall vote.

What to invest in?

In thinking about this diary, I have become cognizant of my own investing styles and techniques. Great! This is a positive thing for me. I think too many people take a pell-mell approach to investing. One day they like gold; the next day they like equities. They have no conviction in what they bought or a sound exit strategy. I have made this mistake myself. I still do.

So the question is, where do you put your hard earned dollars? Where do we start?

1) We need an investing strategy
2) We need an exit strategy
3) We need investments

WELCOME

Welcome to my blog about investing and the economy. Let me introduce myself. I am not a professional investor. However, I do take investing seriously and I have been successful in making money in the stock market. I have had some losses too! On whole, I am up.

I have an MBA from a school in Boston. I sell real estate in Boston. Before real estate, I was a financial analyst for a consulting company based in Boston. My job for the consulting company was good and safe. I just felt caged. I had to leave for my own good.

So, what is this blog about? Well, it will probably change from time to time but the basic idea will be simple.

1) Discuss investing ideas
2) Discuss business topics
3) Make money in the capital markets

Thank you for joining me. I look forward to sharing this "real time" stock idea diary with you!