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Strategies & Market Trends : Value Investing
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To: jeffbas who wrote (7458)6/8/1999 1:17:00 AM
From: Michael Burry  Read Replies (1) of 78656
 
Jeffrey, re: SCS

I just love your rhetorical Q's! A catalyst for a higher price may be if the CEO can indeed double revenues by 2003 and in doing so bring earnings along with them, no? ;0 I don't know if I believe it.

I didn't realize, or maybe I'd forgotten - I'd have to check my notes- that insiders owned 91% of the stock. But I agree with you that such a high percentage would increase the risk of going private in the event of a share downturn, and hence a permanent loss of capital. This should depress the multiple.

I too don't know that it will ever command a higher PE. Probably will have to rely on earnings expansion rather than multiple expansion. Much like Champion or Borders, as I said.

Mike
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