Other likely winners include:
Home Depot (HD) (8/15/03 closing price: $33.54) - Not only is HD an excellent Benchmark Investing bargain (as per our last issue). It also is a source of emergency supplies and equipment for nervous homeowners considering future such events, whether due to infrastructure failures or terrorism. Home Depot sales should pick up further as a result. In addition new home owner or home improvement buying can be anticipated. This normally continues for some time following peak periods of mortgage refinancing and home purchase such as has been occurring recently.
NICOR (GAS) (8/15/03 closing price: $34.01) - GAS has above average stock price safety, per "Value Line." It is not an electric utility but should benefit from an overall increase in concern, legislation, and investment to better meet our national energy needs. NICOR is a holding company which distributes natural gas and stands to profit from increased demand for this commodity. It's debt to equity, while not as high as for many utilities, does stand at 0.96 and its price to book value at 1.98. These are not necessarily strong negatives, but should be taken into account before purchase. The asset is not as relatively risk free as some of the stocks we recommend here. Yet its yield is 5.47% (competitive with the long-term government bond and thus a Benjamin Graham value factor), and its price to sales ratio is 0.58. NICOR's P/E is 11.8, below the average (positive). Return on equity is a healthy 19.6%.
Shaw Group (SGR) ($8.26) - This is also a riskier asset, in my view, than many that we mention in these essays. But this low price to earnings (P/E 5.4) stock has terrific upside potential, and it makes a lot of its money from building for the power generation industry, one now likely to receive much more attention and funding. SGR's debt to equity is 0.81, and its return on equity is currently just 6.4%. This is a micro-cap asset with market capitalization of $311 million. The price to sales ratio is a mere 0.08, and its price to book value (another key Benjamin Graham value criterion) is only 0.48. Momentum is also a factor in SGR's favor. The stock price has jumped over a dollar just since the latest blackout brought to people's attention the need for better power infrastructure.