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Strategies & Market Trends : Value Investing

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To: Night Trader who wrote (13604)	1/5/2002 5:22:18 PM
From: TimbaBear	Read Replies (1) of 78683

martin knight IAIS.... This one is a tough one! From a liquidation standpoint, I'd stay away because they have a NetNet value of MINUS $12. However....there is more than one way to calculate value and my most favorite way is free cash flow generated vs. the cost for me to own that free cash flow. IAIS has a lot fo free cash flow....about $.78/share last year. Questions for me are: 1).What happens if their debt gets downgraded? Their interest coverage ratio isn't that great, while their amount of debt is huge. 2). What impact does 9/11 have on their brand of operation? Do airlines enter into the leasing business as well to recover money from planes they're no longer flying? I don't know the industry, maybe you could give some insight? 3). Paying down the debt at the rate of $4.6M/QTR is a good use of cash flow, but at that rate it would still take them 13 years to pay off existing debt, what is the expected productive remaining lifespan of their fleet? I have some other thoughts on this, but have been called to dinner! Share some of your thoughts with me if you will. Timba

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