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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (8728)	10/22/1999 11:59:00 PM
From: James Clarke	Read Replies (4) of 78627

Random thoughts on net-nets below: Paul posted: <<Steven: Ha! The stock-for-mom factor. Possibly only Dana of my recent posts here would be suitable for a Mom portfolio.>> Interesting post in that Dana is one of the two stocks I literally did buy for Mom in the last week. Berkshire Hathaway is the other. On the net-net front, I'll give Mike another push to look at EBSC (I'm looking at SNH with great interest) - I think EBSC is going to be a huge January stock. I will disclose that I sold the majority of my position in LKI at 8-9, in the interest of full openness on this thread. I didn't like the last quarter. (To keep it simple, what should have happened didn't - that is the best sell signal I know). The net-net I mentioned without disclosing the name a couple weeks ago fell to my price today and I started accumulating a position. The company is so small (the smallest I've ever bought) that I will not disclose the name until I do accumulate a position. My current net-net holdings are now EBSC, MAXS, LKI and the mystery stock. I am looking at several others. I consider USU something like a net-net, because the valuation is just so extreme. We're talking about 5 times free cash flow. The company rushed through its share repo program and has shrunk the company by 10% in just one quarter with just a little bit of incremental borrowing. The reason you might want to watch this one and get to know the valuation is that the company has been by far the largest buyer. Now they are stepping aside until the Board extends the repurchase authorization, which they are unlikely to do until January. Meanwhile tax loss selling season. This could go significantly lower, and if it does (I'm thinking 7) I will be a buyer for the first time since the IPO.

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