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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (15447)	9/15/2002 9:38:03 AM
From: Robert Hoefer	Read Replies (1) of 78666

Paul, you got a good price on FLM last week. I have been poring over it this weekend, and still don't see any serious problems other than a transparent short attack. They've done an effective job of manipulating the news wires and scaring less sophisticated or committed investors, but they can't change the fundamentals. I assume FLM can earn $2.00 this year, and after that, I will subtract .50 or .60 to account for a possible KM liquidation. So conservatively I will estimate $2.50 for 2003. If we can get a p/e of 5 to 10 it's a good buy at less than $6.00. And if KM lives another year the upside is even higher. Current ratio and other liquidity measures look okay and should improve. The company's slideshow presentation is informative and is on their website at www.fleming.com. The conference calls are there, too. Assuming that we know the value of what we are buying, as the price goes down, the margin of safety goes up, and this becomes a safer and safer investment. But psychologically, it doesn't feel that way if you are looking at paper losses.

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