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Strategies & Market Trends : Value Investing

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To: Don Earl who wrote (14739)	7/3/2002 1:42:10 PM
From: Paul Senior	Read Replies (1) of 78710

Don Earl: I don't believe the predictions or explanations of SWY management either. Not sure I even trust these guys. From what I can see - in my little tiny corner of the world - we're about saturated with grocery stores. And the days of 10-15% growth are gone in today's Costco/Wal-Mart/ABS/KR tough competitive environment. Imo, they will all be trying to take market share from each other - and that's not a good thing for investors. I'll bet that the $2.80 (approx.) earnings estimate holds though. That's a drop, but it could be doable. And a p/e of 10 might be sustainable. If there is an earnings improvement over than next year, or if people become willing to pay more for a "presumed" "stable" business, the p/e could rise. On the other hand, it could drop - everywhere where companies have earnings, p/e's seem to be going lower - and SWY might warn again on earnings. So the stock might very well be a short from here. I'm holding my small position and trying to look to the next 12 months.

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