The Motley Fool Discussion Boards
Stocks K / Kaneb Services, Inc.
|Subject: KAB: Reposts from 11Wall (part 6)||Date: 12/15/1999 9:44 AM|
|Author: igodard||Number: 18 of 27|
The message below and the following discussion was posted at http://www.11wall.com and might be of interest here.
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The Wall Board: Stocks (Misc): STOCKS NOT OTHERWISE LISTED: Ivan: KAB
By Gap on Tuesday, December 7, 1999 - 11:35 am:
Strange mix. Your comparison to a utility is quite appropriate. Pipelines are highly regulated
and therefore basically subject to govt. price controls. Pipelines can only significantly grow
revenue by increasing throughput. How does the IS piece "fit"? Unless the techies are
focusing on pipeline-related issues, it seems an awfully strange combination. Disturbing,
even, from an investment point of view, because the businesses are so vastly different.
The pipeline and tanks are valuable assets that can be milked until eternity, throwing off a
good bit of cash year after year. There is little competition worry, since the laying of
significant new pipelines or building of tanks is very difficult today.
I wouldn't worry too much about the litigation. Pipeline companies are always being sued by
someone... that's just a cost of doing business. Right of way issues, spill issues, tarriff issues,
you name it. Someone's always mad at them. Even their customers frequently sue them
when capacity gets tight and has to be rationed. Each customer usually claims