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Strategies & Market Trends : Value Investing
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To: D. Swiss who wrote (10066)2/25/2000 11:58:00 AM
From: Madharry  Read Replies (1) of 78659
 
I don;t know what your background is. I spent 20 years in banking including 5 doing workouts, and a few years analyzing finance companies. If you have spent a week analyzing this company and come back and tell us why this is such a good buy, I will greatly appreciate it. In the 20 minutes I have spent looking at it I can tell you that it would take me about a week to figure something out here.
Some danger signals I could spot in the 20 minutes are that they had to amend the bank agreements about 5 times this year due to violations of loan covenants and they also took huge losses in part as a reduction of retained equity interests in securitized portfolios. Presumably each bank involved in this loan has gone around an done a pretty comprehensive audit on this company. My guess is that they don;t like what they see and the only way they have a shot at coming out whole is if this gets into stronger hands.
I have seen this before and what usually happens is that the principals get some large consulting contract to stay on, and the existing shareholders get wiped out. I have been wrong many times before but IMHO unless you are privy to the info contained in a detailed audit you have no way of knowing whether this company is even solvent. Please correct me if I am wrong as this old dog is always willing to learn new tricks.
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