LVLT.(NYSE)...Level III seems to be a good bet

Warren Buffett has just moved in and its still around its 52 week low. Voice over IP has a huge up-side. Looking at the 1 yr 2 yr and 5 yr performance, I don’t see any reasos why not to buy…Any thoughts…I am looking to buy 7,000-8,000 shares and be out by Christmas. $6.00-$6.50 can easily be had in 6 months! rt

Just checked their website. Their 2004 first quarter factsheet says L3 had about $4 billion of net debt and approx $130 million of EBITDA with high gross margins. A couple of years ago, Level 3 bought some software companies solely for the purpose of staying in compliance with revenue covenants in their debt agreements. Looks like Berkshire Hathaway invested in a $500 million convertible note offering, so his position is more secure than NYSE common shareholders. Still, it is reassuring as he must feel the company has strong fundamentals in its favor to have invested. Perhaps he is anticipating reduced competition from bankrupt rivals, cheap acquisition opportunities, and a cyclically recovering economy to drive revenue and profit growth.

[quote] rytaylor33:
Warren Buffett has just moved in… [/quote]

Below is a stock (as apposed to a NOTE) which Warren Buffet/Berkshire H invested in last year. (PetroChina hk.857). The price went from somewhere around HKD$ 1.70 to $4.55 before he sold out. Even after he left the stock, the price went above $4.85 for some time before dropping as the whole 'H’share sector consolidated this year (between 1st to 2nd quarter).

PetroChina is one of the 3 largest crude oil companies in China. Makes more revenues each year than HSBC! (with less assets.) The good thing about this stock is that crude oil prices are still likely to be strong until the end of this year and demand will always be there longterm. PE is a modest single digit of around 9. The stock price fluctuates by at least a dollar range within a six month period. So 33.3% gain is very reasonable. Current price is around $3.60. (BTW HongKong does not have any Capital Gains tax nor any tax on dividends. Do you pay tax on US stocks? or are you a foreiger for IRS purposes)

I was really impressed when you said Warren Buffet has moved in! Then it turns out its just a Note albeit convertible which means future is definitely bright or the company’s earning power is sound. But I think Revenues/Sales must accelerate to get massive increases in share price. Last year there was a big insane demand for oil. (Well, this is just my opinion).

Level III has really moved the last few days. Hope some of you guys took my advice in the summer.

I always thought buffett didn’t buy technology…but I guess he assumes VoIP is the the future phone.