It's very rare for great companies to go on sale. As the great value investor Charlie Munger said, "A great business at a fair price is superior to a fair business at a great price." The market knows and understands that incredibly well, and while it does offer reasonable prices on great companies from time to time, they rarely go on sale.

So when energy pipeline giant Kinder Morgan (KMI -0.86%) went on sale earlier this month after providing downbeat guidance, I had to jump on it, buying more shares at that rare discount. What makes Kinder Morgan a great company is its tollbooth-like operations of shipping energy around the country, combined with a shareholder-friendly dividend policy and reasonable balance sheet.

The sale is over-now what?
Unfortunately, like most sales on great companies, that one didn't last long. Kinder Morgan closed last Friday at $35.91, near the $36-and-change fair-value estimate that I calculated when picking Kinder Morgan for the real-money Inflation Protected Income Growth portfolio. Kinder Morgan's recovery was part of the reason the portfolio gained a touch over $525 since last week's update, and its price around fair value means its shares still look to be worth owning.

Still, while Kinder Morgan's recovery was nice, toymaker Hasbro (HAS 6.00%) drove the largest share of last week's gains for the IPIG portfolio. It looks like a classic Santa Claus rally on that holiday-dependent company, helped by a surge in last-minute Christmas purchases that propelled overall spending ahead of last year's levels.

We'll know soon whether the market's faith in Hasbro was justified. Hasbro's recent surge prices it above my recent fair-value estimate, but a strong December-ending quarter could cause an upward swing in that valuation.

While Hasbro looks like a clear winner from last-minute shopping, the jury is still out on how UPS (UPS 0.56%) fared. While the rise in online shopping meant more products shipped by UPS this season, the company wasn't quite as prepared for the surge as it needed to be. The surge in last-minute online shopping overloaded UPS's infrastructure, and it delayed some Christmas deliveries.

Like Hasbro, UPS is an IPIG pick trading above my recent fair-value estimate. Also like Hasbro, a strong December quarter for UPS could swing that estimate higher. So the big question now is whether the gain from that late surge will make its way to UPS's shareholders, or whether it will be eaten by the costs of recovering from those delays.

So now, we wait and reassess when the new numbers are known.

Make waiting easier
While both Hasbro and UPS are trading near rich valuation levels, both of their underlying businesses remain solid. In addition, both pay dividends that are covered by cash flows and have decent track records of increasing their dividends. That makes it easier to hold on and wait for the new financial information that's needed to reassess their values before rushing in to sell their shares

Solid businesses with rising dividends are at the foundation of the IPIG portfolio, which as of Friday's close, looked like this:

Company Name

Purchase Date

Total Investment (Including Commissions)

Current Value
Dec. 27, 2013

Current Yield
Dec. 27, 2013

United Technologies

Dec. 10, 2012




Teva Pharmaceutical

Dec. 12, 2012




J.M. Smucker

Dec. 13, 2012




Genuine Parts

Dec. 21, 2012




Mine Safety Appliances

Dec. 21, 2012





Dec. 26, 2012





Dec. 28, 2012





Jan. 2, 2013





Jan. 4, 2013




Texas Instruments

Jan. 7, 2013




Union Pacific

Jan. 22, 2013





Jan. 22, 2013





Jan. 24, 2013




Becton, Dickinson

Jan. 31, 2013





Feb. 5, 2013




Air Products & Chemicals

Feb. 11, 2013





Feb. 22, 2013




Emerson Electric

April 3, 2013




Wells Fargo

May 30, 2013




Kinder Morgan

June 21, 2013








Total Portfolio




Data from the IPIG portfolio brokerage account, as of Dec. 27, 2013.

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