Ames Department Stores (AMES) Message Board

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Microcap & Penny Stocks : Ames Department Stores (AMES)

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To: Arthur Tang who wrote (1683)	8/27/2000 1:53:55 PM
From: Gary105	Read Replies (1) of 1911

Art - could you comment on what you mean about a technical entry point well below $5? Why do you see this and at what level to you see this? I am still waiting to pull the trigger on this one. I see both pluses and minuses: Biggest plus is earnings and the P/E. Insider buying is also a plus, even though it is light. The insiders are always early and AMES insiders have never bought heavily. Negative is mountain of debt and low ROE. Winning retail stocks trade at much higher than book value because they have high ROE and low debt to equity. The only potential fix I see to this situation is a drastic improvement in inventory turnover and using the delta inventory to pay down debt. The other negative is FMR sales.....a new england based fund reducing its stake in a new england based company is not a good sign. Back to the insider buys. A few years ago i remember similar quantities of buys in the $3s. The stock ultimately dropped to about $1 before going up thirtyfold from its low. But I dont think the debt burden was nearly as great then. Comments welcome

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