Mr. Pink's Picks: selected event-driven value investments Message Board

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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments

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To: Mr. Pink who wrote (1562)	5/22/1998 8:31:00 AM
From: valueminded	of 18998

Mr. Pink: Please give me feedback on the logic for evaluating octel. EBITDA about 160mil . Total shares 15million, trading when issued per your note at 32.5 Debt 450 million. TEV is then about 900million, with EBITDA at 160million. Negatives are the cash flow section of the business is in decline and expected to decline in volume by 11% next year. Debt is expected to be paid down 20-30% within 1 year of spinoff (or so I am told) The TEV/EBITDA ratio is about 5-6 which doesnt seem bad except that the business is in a decline. The parent is a member of the SP500, the spinoff won't be so I would expect significant selling in the first trading weeks. Please comment on my logic and if you had a price what you think would be a good price for this business. As always, thanks. I am following your latest pans - SIR, MRVC and CLCX, (these are the only ones I feel comfortable with since they trade options) In this day and age of overpriced stocks, what do you see as the "events" that will cause MRVC and SIR to decline. CLCX seems rather apparent.

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