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Strategies & Market Trends : Value Investing

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To: Tomato who wrote (11337)	10/20/2000 11:30:55 AM
From: Daniel Chisholm	Read Replies (2) of 78703

Re: that old saw, the difference is that I like to look at others' opinions! ;-) Can EK be considered to be something other than an old line industrial concern, which will (relatively) soon fade away (here we can see the likely reason: digital photography), trying without success to make the transition to the successor technology? If this is the case, then I'd be tempted to value it on the present value of its free cash flow for the next ten years, minus some discount (based on the assumption that management will fritter away cash flow that ought to have been "free", on an unsuccessful succession plan). In others words, not very much. Am I being too pessimistic here? The thing that concerns me is that they might have too much bureaucratic bulk and inertia to succeed beyond the digital photography transition, and that their proud heritage will likely prove a liability w.r.t. shareholder value (in that they won't admit that they should gracefully wind up the company and get the most possible cash back to shareholders). There you have it, my opinion, if you care to look at it ;-) - Daniel

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