I have been in New York City since Tuesday. I went to a conference on cash and short-term bond portfolios. Wednesday and Thursday I have been visiting with analysts from various brokerage houses. I've visited with analysts from Union Bank of Switzerland, Barclays, Morgan Stanley, Lehman Brothers, and Goldman Sachs so far. I will meet with some more firms tomorrow.
Among my other responsibilities, I do credit analysis on companies in the Energy and Pipeline industries, the Utility industry and Basis Industries which covers Metals and Mining, Paper and Forest Products, Chemicals and Industrial Gases. I thought I would share the consensus view of the meetings I have had so far.
Energy: The company fundaments are very good. Margins are staying up and profit continues to surprise on the upside. Debt has been paid down to minimal levels and the companies continue to generate significant amounts of Free Cash Flow. It seems that several companies are going to be doing shareholder friendly things with the money such as buying back shares or increasing their dividends.
There is probably not much worth in their bonds right now as the coupons are low and the possibility of capital appreciation is minimal. If you decide to invest in Energy companies, stay with the stocks of the fully integrated companies.
I'll address some more tomorrow, now go out and multiply your money!
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