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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (14166)3/29/2002 3:42:10 PM
From: rich evans  Read Replies (1) of 78740
 
Hey Paul, does SLR qualify as a value investment yet. They were downgraded by Moodys for their debt but
SLR debt is not an issue in my opinion. They reported Debt to cap
ratio of 39%. But the ACES mandatory convertibles are really equity so the debt to cap is
30%. JBL is 20%. And debt net of cash is in the teens. And debt net
of cash and inventory which is take or pay is 0. They had 1 bill in
cash flow from operations this quarter and will continue to very cash
flow positive. So the whole problem is revenues. SLR and JBL revs for next
quarter also projected flat but they have announced a lot of new business which they need to improve their metrics . For example JBL revs flat But it was seen better because of its
cost metrics are so much better. Inventory turns over double SLRs at
4.5 versus 9 for example. DSO for JBL at 40some days versus 64 for
SLR. Gross margins 50% better then SLR. SO SLR needs revs badly to increase their run rate of 3 bill as the SGA their is 7.5% which eats up all their profits but they have announced new revs coming of 1 bill per quarter which should be accretive but they are ramping slowly and wont be fully ramped till end of 2203 per cc. Maybe the market though will
see this and bid them up on expectation of future now that balance
sheet is OK. They are at book value right now.
Rick
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