I�m a numbers
High quality businesses and top management are
reflected in the numbers, sooner rather than
The numbers for KSU are outstanding. By inference,
KSU management must either be outstanding or
I�m a relatively new shareholder
with KSU, and went to the annual meeting to get a
sense of management quality.
I could not be more
A courteous but no-nonsense meeting of 48 minutes
was conducted by Landon H. Rowland, Chairman and CEO.
He impresses me as a smart, shareholder-focused and
an �actions speak louder than words� type of guy. He
is in charge, knows exactly what he�s got and knows
exactly what he�s doing.
He stressed the
importance of motivating top quality managers with
stockholder-friendly incentives, and then letting them run their own
shows. He also stressed the importance of managing KSU
assets in such a way as to maximize value in a tax
Rowland is obviously on the same
page as shareholders.
I asked Rowland if KSU
had plans to do a tax-free stock dividend of DST
shares to KSU shareholders.
Rowland replied that
he was not free at this time to discuss company
plans to spin off or otherwise redeploy DST assets. A
head-table associate remarked that a tax-free dividend of
DST would not be possible because KSU presently owns
less than 80% of DST. Later, Rowland mentioned that he
had no intention of letting KSU�s position in Janus
to fall below 80%.
What I learned:
happy to be in business with these guys. I asked my son
Nicholas, 17, what he thought. Nick replied: �They remind
me of Berkshire Hathaway.� Me too.
1. The Stilwell spin off is the beginning, not the
end of this restructuring.
2. The railroad is
strategically positioned for quick sale.
3. Janus will
soon be separated from Stilwell in a tax-free spinoff
to Stilwell shareholders.
4. DST will merge
with the remainder of Stilwell.
these guys know what they are doing.
more KSU at 78 � this morning.
It's been my experience that reverse splits tend
to be the precursor to the market turning sour on
the companies shares and share price erosion sets
in.Your post meets my definition of ignorance. I often
dis- agree with other posters but try not to respond
in such a way as to reflect on my own upbringing.
...keep your mouth shut than to open it and
remove all doubt to your ignorance!
In 1 for 2
reverse split you end up with half as many shares as you
had before, BUT they are DOUBLED in price per share.
SO IT IS A NET 0 difference! You have the same value
"...after your shares have been sliced in
nstead, Mr. Greenberg appears interested in some
other acquisitions in financial services --
specifically, a mutual-fund company.
Pointing to the $1
billion-plus contribution to last year's pretax operating
profit by SunAmerica, AIG's main asset-management
business, he says, "Keep looking at that line on the income
statement. It will grow ... . We will acquire companies to
get us where we want to be."
unusually blunt comments came in a May 18 speech at the
giant annual confab of the Investment Company
Institute. In the eyes of many mutual-fund executives, the
comments amounted to AIG hanging out a "Wanted" sign for
mutual-fund assets. Since then, AIG has been identified as
having been a bidder for Pioneer Group Inc.'s Pioneer
Investment Management unit, which an Italian bank bought for
$1.2 billion. While AIG ultimately dropped out of the
bidding for Pioneer, AIG officials acknowledge that they
are examining other possibilities.
various occasions recently, Mr. Greenberg has reiterated
his lack of interest in either Wall Street or in
buying a commercial bank, another oft-rumored
acquisition target for AIG. Mr. Greenberg's biggest
objection: A securities business has way too much earnings
volatility to join the AIG family, whose stock is a Wall
Street darling partly because it has such steady growth
in net income (about 13% a year throughout the
'90s). Also, such an acquisition could create
"important" cultural and compensation clashes, he told the
As for commercial banks, he
sees no need to pay for one when marketing pacts can
be readily struck. While the federal barriers
separating banking, insurance and securities businesses have
been dropped, Mr. Greenberg said that cross-marketing
opportunities are available without doing a full-blown
AIG ramped up its exposure to the asset-management
world a year and a half ago by buying variable-annuity
specialist SunAmerica for $18.5 billion in stock, and it now
has $34 billion under management. In an interview,
SunAmerica Chairman Eli Broad notes that he and other AIG
brass are casting their net widely for fund firms,
considering both retail (geared toward individuals) and
institutional money managers, those with a well-known brand
name and those without one.
Steve Neamtz, chief
executive of AIG Asset Management, a unit seeking to spread
SunAmerica's funds abroad, has been looking at fund groups
specializing in "the stuff that's been working" in the
mutual-fund world, including technology-sector expertise and
the "aggressive growth" style of investing in
unusually fast-growing companies.
He notes that
the funds of the tech-heavy Janus Capital Corp.,
majority owned by Kansas City Southern Industries, "meet
the criteria" of consistent performance that AIG
wants. But Janus, with some of the hottest funds over
the past several years, also epitomizes a major
hurdle for would-be acquirers: "God only knows what the
price would be."
I agree with you and have been saying all along.
Did you know SV also owns hundreds of thousands of
CSC and a major Boston Bank, the name escapes me. I
agree with the railroad being bought out, its assest is
one of a kind and recently tracks were
upgraded/replaced. One share DST to every 22 SV shares would be
about correct if distribution would to take happen.
KSU is a value/growth stock that just keeps
Please give some details about the
other assets you mention.
In valuation, I strive
to be conservative but realistic. I don't want to
overlook some hidden assets.
No question that BNSF and UPRR will start bidding
war for KCS once the STB lifts recent ban on rail
mergers. KCS has been a thorn in the side of the 2 majors
in the west. The only barrier to takeover before was
the high valuation of the corp due to Janus. As a
standalone railroad KCS cannot compete/survive. They will
likely solicit partnerships in next 6 mos.
I'm sorry, but I don't follow the KSU
I would not own it now.
However, I would not
have bought KSU preferred in the first
Generally, I don't like preferred stock at all, and this is
Of course, I like KSU common a
If I seemed aggressive.
Nelson is not a
mutual fund manager. It does not have Janus-like
performance and track record. It cannot be valued on the same
Neither can the other businesses- which may explain why
Janus management don't want them.
If SV did spin
off Janus, ask yourself what would be
What did they pay for these things and when. Given
that they are not Janus, have they appreciated so much