Money and Investing Thoughts

Inergy, L.P. | Investor Relations | Press Release.

I think Inergy LP (NRGY: 17.62 -5.06 -22.31%) should definitely be on every income investor’s radar. The have increased the distribution every quarter for something like 7 years straight. Their management has cost under control and a well managed growth plan.

The retail propane market seems pretty recession proof (almost too late now!). Growth is possible by making acquisitions in this still fragmented business.

Inergy has also been creative in the growth of their midstream natural gas business. With operations focused on California and New York, they have large markets to grow into.

Although the share price dropped to close to $12 over the last year, the share price is now 2% above where it was in the middle of 2008. Throw in a 10%+ dividend and long term investors should be pretty happy.

Headwaters Incorporated Announces Results for Second Quarter of Fiscal 2009 – Yahoo! Finance.

I have always thought that the different business lines of Headwaters, Inc. (HW: 2.39 0.00 0.00%) were well managed and offered a lot of future potential. Unfortunately, those business lines have been particularly hard hit by the economic slow down.

Headwaters has been in a restructuring process of their basic business for about two years now. The previous bread winner ceased to be so when the portion of the tax code that allowed the profits expired. Since they HW has been expanding into related lines, but has not yet generated an overall growing revenue and profit stream.

At this point if I was an investor looking at the stock I would wait until economic conditions start to provide positive results to the company’s building materials lines with increasing revenues and margins. Since I already own a small position (much smaller than when it started!) in the stock, I am going to hang on and see how long it takes for the company to turn thing around.

It has been entertaining (kind of) to watch the amount of fear based generated by the supposed, alleged, sort of a pandemic caused by the swine flu. Unfortunately, today Reuters has burst the bubble:

Its global spread has kept alive fears of a possible pandemic, although scientists say this strain does not appear more deadly than seasonal flu. via WRAPUP 2-Chinese, Mexicans return home as flu fears ease | Markets | Markets News | Reuters.

The bad news is that Mexican citizens have been held in quaranteen all over the world. The Mexican tourism industry has taken a huge hit and pork producers are see the prices for pork fall as the great unwashed start to believe they can catch the flu from their pork chop.

The good news is that UN and WHO officials have gotten huge amounts of media air time and they all can have a big meeting in Geneva in a few weeks, drink excellent cocktails and enjoy gourmet dinners.

According to the article above the number of confirmed death by swine flu has reached the staggering total of 26. By comparison, in the U.S. (pop. 300+ million) approximately 7,000 people die every day from various causes. Think about it.

This line from an article on MarketWatch  gives in a nutshell why the stock market continues to rally:

Buoyed by earnings that are proving better than dire forecasts, U.S. stocks on Thursday moved toward solid April gains, with the Standard & Poor’s 500 index poised for one of its strongest months in years. via With earnings bar low, April strong for stocks – MarketWatch.

There is so much pessimism built into the the current economic forecasts that when economies follow their natural cycle and start to recover, the surprises will be towards the upside. The market has continued strong so far in May and the S&P500 is up 35% from the low hit in early March.

With the stock market historically being a 6 to 9 month leading indicator of an economic recovery, if early march was the true low for this economic cycle the overall economy should be showing positive growth near the end of 2009.