If you believe the Presidential panel 's projection of 90,000 deaths next year from Swine Flu then you might want to look at the bright side of all those unexpected funerals.
Death Service related public companies include:
Hillenbrand Inc. [NYSE:HI] written up earlier here and on BeatingBuffett.com
Service Corp, Intl. [NYSE:SCI]
Stewart Enterprises [NDQ:STEI]
Carriage Services [NYSE:CSV] written up earlier here and on BeatingBuffett.com
The Strategy of Ben Graham – Warren Buffett’s Mentor
From 1923 to 1957 Warren Buffett’s mentor, Ben Graham, followed a strategy of investing in net-nets. He said: “It always seemed, and still seems ridiculously simple to say that if one can acquire a diversified group of common stocks at a price less than the...net current assets alone…the results should be quite satisfactory. They were so in our experience, for more than 30 years.”
Today net-nets are rare. They are collected under GuruFocus’ Net-Net Screener. GuruFocus also publishes a monthly newsletter which recommends the safest net-nets. All of these are included in GuruFocus Premium Membership.
Some of these companies operate like insurance companies. If the clients live longer, they earn more, or at least get to invest the premium (float) longer. The profit is in the investment of the premium clients paid upfront.
Poeple dying an untimely death is bad for these businesses. Especially during a bear market, a major epidemic is bad news. They could be forced to sell assets at the worst of times to raise the cash needed to provide the service.
Spend just five minutes on the CSV or SCI 10-k and 15 minutes thinking about them.
Hillenbrand is another matter.
In short, some of these companies will do well if many poeple die an untimely death and some of them will do badly. It is like grouping BA, AYR and LUV because they all do things with planes.
That only applies to pre-need payments. Only a small percentage of revenues come from that source.
I'm speaking about all the unexpected deaths that are predicted to occur due to Swine flu.
When an otherwise healthy person dies at a young age, the death services are accretive to overall revenues. Add in 90,000 extra deaths as the presidential panel does, and funeral homes, casket makers, and crematorial product manufacturers will do landslide business.
If Comrade Obama's people get everyone worked up over this and nothing much happens
they could be digging their own graves.
When it first appeared in Mexico, I started checking out these companies, so I can't see how any potential increased business can't already be priced into their shares. Holders ar likely hoping for hype in order to get out of their positions now.
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More) Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names
Feedback
European Shorting
My Portfolios
Browse Gurus
Print
Email
Subscribe RSS
RSS
Poeple dying an untimely death is bad for these businesses. Especially during a bear market, a major epidemic is bad news. They could be forced to sell assets at the worst of times to raise the cash needed to provide the service.
Spend just five minutes on the CSV or SCI 10-k and 15 minutes thinking about them.
Hillenbrand is another matter.
In short, some of these companies will do well if many poeple die an untimely death and some of them will do badly. It is like grouping BA, AYR and LUV because they all do things with planes.