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Strategies & Market Trends : Value Investing

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To: armi who wrote (43283)	7/12/2011 12:10:42 PM
From: Difco	of 78651

Excellent points, definitely not a safe investment - I see your points. IMO upside thesis is based on the facts that the cash flow is sufficient to support the debt level and since equity approximates 10% of debt, then we have a leverage situation on our hands, where increase in assets would increase equity more than the debt. On the other hand, you are right, that decrease in assets could be very dangerous to the equity position.

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