| I wonder if you noticed the figure for volume in FLM this week. 161,852,000 shares, on about 50M outstanding. Every share in the company traded more than three times over in one week. Add that to the short interest of more than 30%, and it would seem that daytraders are in speculative mode, creating their own price decline. Just like bidding the price up beyond reason, the game has to end eventually, only sooner. While a stock can go up indefinitely, there is a kind of floor on the downside. Buyers will always step in at some price. As far as fundamentals, looks good. About 3.5 times earnings of about $2.00 this year. 2003 earnings of say, $3.00 gives a p/e of a tad over 2. Nice earnings yield. About one times next years cash flow (Value Line). If K Mart folds, earnings hit of fifty cents, but that's priced in at this point, wouldn't you say? Finances are okay and should improve. Company will announce fate of retail stores end of this month. I predict they close the worst stores and sell the ones they can. If they close businesses with a negative profit margin, that helps next year's margin. No other problems I see except integration of recent acquisitions, but it seems to be going okay so far. At the recent price perhaps this is the kind of "cheap hamburger" Warren Buffet rejoices in buying. And knowing Southeastern Asset Management(Longleaf Partners's Funds)is long is a comfort. I'm not letting the amateur short sellers scare me out of this one. Be brave, own Fleming! |
