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Strategies & Market Trends : Value Investing
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To: hoyasaxa who wrote (20455)1/12/2005 10:21:42 PM
From: Spekulatius  Read Replies (1) of 78670
 
re WIRE - interesting pick. I figure that WIRE as a copper manufacturer is similar to STEEL manufacturers and distributors like MUSA, RT or IIIN. What bothers me about those stocks is that they have cashless earnings. Despite the apparently high earnings, the free cash flows are absent or even negative. it appears that the cash flow get's sucked into inventory as it rises in value due to appreciation of raw material prices. now with WIRE, the inventory is down, but receivables are up by a huge amount, i wonder why. Net effect is that they are FCF negative and of course don't pay a dividend either.

As I said WIRE is interesting but one really needs to understand the balance sheet and cash flow statements before making an investment decision.
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