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Strategies & Market Trends : Value Investing

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To: Grommit who wrote (10047)	2/22/2000 11:50:00 PM
From: Paul Senior	Read Replies (1) of 78624

Grommit, I see CTB as a scary buy also. They can't get away from being tagged as a tire manufacturer - and another drawback, imo, is that they're not one of the big players either. ROE at about 14% is slipping over the past few years. And there may be integration and diversification issues also. I do not understand how this company remains profitable-- but they do. The relative dividend model I've used on CTB before shows that when the dividend is 2.5% or greater, CTB is a buy. (stock now yields 3.8%). Another way I might look at CTB is that given its book value (about $11/sh tangible, $12+ per Yahoo,), but not understanding the recent acquisition- I'd say fair value might be about $19-21/sh. And the stock occasionally trades there. I am considering adding to my small CTB position around here ($11). Also to be considered are other companies in the auto parts, auto subsystems businesses which may be relatively cheaper than CTB but also have decent prospects for a gain in 1-2 years. I'm looking to add to my position in DRRA tomorrow. And I'm looking at DCN. Plus I just may go for the whole car with DaimlerChrysler (DCX)if it drops a couple of more points or add more Nissan (NSANY)if it gets nearer to its lows. Paul

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