BUD/DEO/COST/XOM/PTR

BUD and DEO

Surprised at their D/E ratio. Although Buffet holds on 4.7% of BUD. The company doesn't seem to have a good balance sheet. Especially the D/E ratio is > 3 for BUD and >2 for DEO. Even though there might be some hidden value in equity, it's still a little too high. Yet, need to do further research see if such high D/E is typical for this industry.

BUD $50.35

DEO $81.40

COST

Read Barrons article about Costo. Impressed by the management and its consistency in terms of building a great business. It bought back some shares in 2006 for a total of 20 million shares. The only thing kept me from buying it right now is the P/E. It's hovering about 24. Costco will be a good long term investment if entry at a low PE.

COST $58.10

02/22/07

PTR and XOM

Buffet bought PTR in 2003. It was a very wise purchase decision. The stock has since five fold.

PTR in short-term won't have too much upside for two reasons: increase capital expenditure in 2007 and its already appreciated share price. Compare PTR to XOM has some similarities. XOM has a higher P/E for some reasons:

Its ROE has been steadily improving in the past four years to 34%, an impressive number. PTR is also improving. But at a 27.83% behind.

PTR do have a much lower D/E ratio. <0.5>

PTR has a 70+ days to empty inventories vs XOM's 15- days. This could be attributed to better transportation system in US. Both can clear receivable for within a month.

XOM has been gradually and consistently buying back shares in the past five years.

PTR $120.52 PE 11.26

XOM $75.22 PE 11.36