Day: April 11, 2007

Vote Your Proxies!

Vote Your Proxies!

I had a pretty good day in relative terms today. Leading the charge were Premium Standard, Patterson-UTI, YRC Worldwide and Jones Apparel. Trailing the pack were Cemex, Lithia Automotive, Group 1 Automotive and Komag.

My main intent in this post is to encourage everyone to vote their proxies. We have a responsibility as capitalists to watch over the firms that we own to the greatest extent possible, and to encourage them to foster greater shareholder friendliness. I don’t want shareholder votes to be like ballot initiatives in California, where one becomes an amateur legislator, but I do want the ability to vote down directors, and for 5% of the shareholders to be able to propose binding rules to the company, for the shareholders as a whole to vote on.

In my own voting, I vote against management when they have not provided an adequate relative return, and vote with them when they have, aside from the principles listed above. If all mutual funds voted this way, corporate America would clean up its act, and rapidly.
Full Disclosure: long PORK, PTEN, YRCW, JNY, CX, LAD, GPI, KOMG

Railroad REITs — What if?

Railroad REITs — What if?

With Buffett’s purchase of Burlington Northern, I have to toss out this idea: what if Burlington Northern took its extensive land holdings and spun them off into a REIT, where the railroad would pay the REIT a fee for renting the rails?

This could be a very tax-effective means of running the business(es). I would imagine that the operating company would pay a small dividend at best, while the REIT would pay a significant dividend.

Now, the fun question is which entity would be more valuable. I would guess that the REITs would be more valuable, given the scarcity of tracks. That said, logistics are probably worth more… the ability to use the track intelligently is worth more than the tracks, until things become more congested on the rails.

Cemex Cements The Deal

Cemex Cements The Deal

Cemex finally achieves it great ambition of becoming the world’s largest cement company by market capitalization with its acquisition of Rinker. Holcim and Lafarge slip behind Cemex.

Cemex is still cheap in my opinion, and will wrench cost savings out of Rinker. The US authorities have already passed on the deal, telling Cemex what they must divest. The market rendered its own verdict, sending both Rinker and Cemex up in price. That’s a good sign for the future.

Today was another good day for me, with Cemex leading the pace, followed by Bronco Driling and Anadarko. Trailing the pack were Dow Chemical, Tsakos Energy Navigation, and Komag.

Full disclosure: CX LR BRNC APC DOW TNP KOMG

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