Robbins and Myers (RBN): Is one of the most undervalued names around, trading with a forward P/E of just 11.68 and 0.9x its 08’ revenue growth rate. EBITDA margins, which are an important indicator of a company’s profitable, are north of 30% companywide. However, the company’s stock has gotten killed, down about 60%+ since its all-time high of $55 per share in late July, setting up for an explosive earnings upside surprise this week. Robbins & Myers is divided into two main business platforms: Fluid Management supplies Robbins & Myers with a substantial part of its total revenue. Fluid management, especially its pressure pumping systems, is essential in keeping oil rigs squeaky clean, allowing them to pump as much oil as they physically can. With oil still around $100 per barrel, it's only natural to assume this part of the business is doing well. Process Solutions deals with the chemical and pharmaceutical sectors. Its Romaco division, which has been very volatile in the past, saw large orders at the beginning of the third quarter. Most analysts have yet to add Romaco's earnings potential into their overall estimates. Once they see a third quarter of steady growth and orders in Romaco, analysts are likely to boost their estimates. Additional, in the third quarter conference call CEO Peter Wallace, hinted that some large orders where in the pipeline for Romaco Yes, it is true that industrial goods both domestically and international have sown a bit. But, as Kevin Maczke of BB&T Capital Markets said last week “We do not believe the 'sky is falling' as the recent stock action would imply, and we continue to see a robust fundamental story in Robbins & Myers” Maczka added, “We believe that current prices of oil and natural gas are more than sufficient to drive increasing demand for Robbins & Myers' energy-related products” I couldn’t agree more

Yum! Brands (YUM): Simply put, Yum! Brands is going to have a monster quarter, due solely impart with massively lower commodities/input prices. Prices of corn, wheat and other input costs have fallen off the cliff, as the commodities trade continues to unwind. I cannot think of a better play off of this, than Yum! Brands which owns Pizza Hut, Taco Bell and KFC. The stock is $2 from its 52-week low, which given the current economic environment we are in seems nuts

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It is impossible to catch a falling knife, but it is possible given a company’s fundamentals to see when current market sentiment regarding a company’s futures earnings power has reached a panic-level peak. Shares of Freeport-McMoRan Copper & Gold (FCX) fall perfectly into that category. Freeport-McMoRan, which is currently trading for $45, hit an all-time high of $126 per share mid-May. Additional, from September 26th to the close on Friday October 3rd, shares have fallen from $65 to $45, down a whopping 35% as the great commodity unwind takes place. In my view, this hideous decline in shares of Freeport McMoRan represents a generational buying opportunity Freeport-McMoRan is one of the world’s largest copper, gold and molybdenum mining companies in terms of proven reserves and production levels. The company has worldwide reveres of copper of around 90 billion pounds, 1.8 billion pounds in molybdenum, and 41 million ounces of gold. With production levels since mid-2008 of 4.35 billion pounds of copper, 85 million pounds of molybdenum, and 1.8 million ounces of gold. In 2007, mining revenues by commodity are as follows: 78% copper, 12% molybdenum and 10% gold. In mid-2006, Freeport and Phelps Dodge announced that they signed a definitive merger agreement under which Freeport will acquire Phelps Dodge for approximately $26 billion dollars in cash, creating the world’s largest publicly traded copper company. Since September 3rd, copper prices have fallen off a cliff, going from $3.4 to $2.8 (although, they are up right), as market sentiment about a global slowdown (see the Baltic dry index), the impact of a slowing Chinese economy and the strength of the USD$, have all acted as negative tailwinds for shares of Freeport However, current world supply of copper is still VERY tight, at around 22k Tonnes; which represents less than 5 days of total global consumption. Since 2005, copper production has not met end-client expectation/demand, as the 3-year production shortfall average is 800 kilotons each year. In 1980 China consumed fewer than 5% of global output for copper; by 2000 consumption was over 10%, and by 2005 consumption was north of 25%. From 1985-2007 the world consumed 300,000 kilotons of copper, from 2008-2020 1) consumption will be 300,000 kilotons 2) of which 32% will be bought by China. Basically, the world needs as much copper in the next 12 years as the last 22 years. The current spot price for copper is trading at $2.8/per lbs, For its 3Q08’ guidance Freeport is using $3.14 as its “base” price for making its estimates---this is a decline of about 13%. Since it costs Freeport about $0.75/per lbs to extract copper from the ground, analysts estimate cuts make no sense, as operating margins will still come in north than 40% Copper sales (billions lbs) went from 3.6 in 2006 to 4.1 in 2008, with projected sales of 4.8 by 2010. EBITDA on $3 copper is around $11 billion dollars, with annual operating cash flow of $7 billion. Copper +- $0.20/lbs = $850MM in EBITDA, $490MM in net income, and $575 in operating cash flow Freeport is also sitting on a massive amount of gold (just under 50 million oz), which comes to about $50 billion dollars worth of gold. Margins here are also north of 40%+ as it costs Freeport around $250 an oz to mine the gold from the ground. Gold sales (million ozs) went from 1.9 in 2006 to 2.3 in 2007, with projected sales of 2.1 by 2010. Gold +- $50/oz= $90MM in EBITDA, $45MM in net income, and $50MM in operating cash flow Molybdenum, a key element to strengthen steel; sales (million lbs) went from 69 in 2006 to 75 in 2008, with projected sales of100. Moly +- $2/lbs= $140 MM in EBITDA, $100MM in net income, and $100 in operating cash flow. Although current moly production is meeting demand, refiners and roasters are expected to run into a serious shortfall from 2009-2015. Moly roasters/refiners process the molybdenum into a fine powder, or pellet. Total world molybdenum roaster capacity is currently 320 million pounds per year, barely enough to meet demand. There is not much excess roasting capacity, and no one is actively permitting for the production of any new roasters in the United States. Global roaster capacity also looks limited, and a future roaster shortage is predicted. Western demand is projected to increase by around 3 percent annually, while China and the CIS demand is projected to increase by around 10 percent annually, increasing overall global demand by around 4.5 percent annually. Increasing demand can be attributed to two main factors: 1) Hydroprocessing catalysts are becoming essential for crude oil 2) The other contributing factor is the increase in nuclear reactor construction. There are 48 nuclear reactors to be built by 2013, and approximately 100 are to be built by 2020. The average reactor contains about 520,000 feet (160,000 m) of stainless steel alloy. Some larger reactors contain over 1 million feet of stainless steel alloy. Clearly, the trend for moly prices are up Freeport is also working on several important projects: Safford Mine: Major new mine in Arizona, SX/EW facility continues to ramp-up to full rates; produces 24MM lbs in 2Q08. 240MM lbs of copper per year; $650MM in revenue Miami Mine: Restarting the Miami mine, 100MM lbs of copper by 2010. 600MM lb copper reserves Climax Mine: Restarting the Climax Mine, $500MM “brownfield” project, construction will start by 2010. Initial annual production of 30MM lbs of moly;“brownfield” has the largest, highest-grade undeveloped moly resource with substantial upside. El Abra Sulfide: Large sulfide mineral deposit underlying current oxide pits. New leach pad & modifications to existing crushing plant; construction to begin in the second half of 2008—all of this extends the mines life by 10+ years. Also, provides 325MM lbs copper/year aggregate to replace current oxides. $450MM project Grasberg Mill (Indonesia): DOZ expansion, operating about 50K capacity at record 88K mt/d in 2Q08; further expansion to 80K underway with target completion by 2010. Aggregate copper in “Big Gossan: is to reach full rates in 2011, with 125MM lbs/year and 64K ozs of gold/year Tenke Fungurume Mind (Congo): Engineering procurement & construction activities continue; concrete work, steel tank erection, structural steel & logistics/infrastructure development. Initial productions target 2H09’; aggregated annual production of 250MM lbs of copper & 18MM lbs of moly Summary: Freeport is the world’s premier publicly traded copper company worldwide. They are also the world’s largest molybdenum producer, with significant gold operations as well. Their business is geographically diverse, with attractive project pipeline growth. As of 9/25/08, Freeport bought back 6.3 million shares with an average price of $79.15. Under its 30MM shares buyback program, management still has 23.7 million shares to repurchase by the end of this year. The yield is currently 4.4%

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