Wednesday, December 17, 2008

B2B burgh

Burgher Jon is tracking a basket of Pittsburgh stocks. There is also a Bloomberg Pittsburgh index focused on Pittsburgh based firms. Looks like it has been doing at lot worse than even the market has been doing in the last few months which says a lot. I wonder how much local investors weight investments in local firms. That all just came to mind because on Bloomberg radio somebody mentioned that the stock for Ariba is having a high volume day or something like that. Ariba stock, currently around $7/share, was valued at an equivalent $989 in February 2000. Four years later it would buy out Pittsburgh-bred Freemarkets that was once Pittsburgh's beachhead in the dot-com mania that was going to save us all. Who recalls that when Freemarkets went public and it's IPO gave it a market capitalization of just under $8.5 billion that day making it one of the most valuable private companies in the whole region. It was December 1999, we should have had an anniversary party last week or something. But the point is, massive stock losses are not exactly a new thing, at least in specific cases.


Anonymous TheTruth said...

Re: Pittsburgh basket

Any thoughts on Alcoa?

At current price levels they are paying a 6.5% dividend with a PE ratio of less than 5. Seems like they are (unfairly?) getting dragged down with the rest of the market.

Thursday, December 18, 2008 10:31:00 AM  
Blogger Burgher Jon said...

Hey Chris, Thanks for the mention. I haven't even taken a gander at Ariba/FreeMarkets since I started tracking this Pittsburgh Portfolio. Being a technologist as my day job, their product is one that faces a bleak future in the face of integrated solutions like SAP and Oracle. However, as a whole I think Pittsburgh could have a good year in 2009 (at least relative to the market). This would likely be thanks to Obama's infrastructure project (they'll need US Steel and PPG for that) and PNC's success. There's a reason I'm starting this portfolio now eventhough I've had the blog for a while ;-).

To TheTruth's comment, Alcoa is getting very fairly dragged down, and not just becaue of the rest of the market. I had bought alcoa as part of the original basket but sold them off last week. Their dividend yield is enticing, but I fear they will elect not to pay it 1Q2009. This will cause their stock price to plumet. Outside of a potential merger with a chinese aluminum manufacteur, Alcoa simply can not keep up with the low prices over seas. My post on Alcoa is here.

There's no reason to go as dangerous as Alcoa if you're looking for dividends in the burgh. PNC is just inches from its 52 week low and currently at about a 6% yield. No P/E below 5, but for good reason, the company has some serious growth prospects as NCC merges. I actually just added them to my personal portfolio with a limit buy at 44 (at 44 their dividend is exactly 6%). Heinz is also a good one, their ex date is tomorrow.

Thursday, December 18, 2008 10:12:00 PM  

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