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Strategies & Market Trends : Value Investing

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To: 249443 who wrote (14201)	4/3/2002 8:21:43 PM
From: TimbaBear	Read Replies (1) of 78740

mrcjmoney I just couldn't help myself today! I bought ACK (Armstrong Holdings) you know, the flooring company. Right up front, they have filed bankruptcy and it's about asbestos litigation. But I'll tell you, there comes a point when the money is just laying there...... I get Free Cash Flow of about $2.80/share (I bought the shares today for $3.32). I get a NetNet valuation of $35.00/share. Even in bankruptcy proceedings ACK has a Return on Capital Employed of 10% (If I use FCF instead of earnings it's 14%). This is a company that filed bankruptcy to stop the onslaught of asbestos litigations. They have a solid business model, and even assuming the carrying of a multi-billion dollar debt from asbestos, their cash flow would be solid for this price point investment. I backed away from some other companies due to asbestos, but I just had to take a shot on this one. I'll throw the shares in the IRA drawer and see how they look in 5 years or so. Timba

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