U S FILTER (USF) A Water Stock ! Message Board

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Non-Tech : U S FILTER (USF) A Water Stock !

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To: Robert F. Newton who wrote (42)	7/24/1997 10:06:00 PM
From: Carl R.	of 361

I don't have a problem with cash acquisitions, it the dilitory stock acquisitions that bother me. A recent WSJ article pointed out that companies that have done a stock acquisition significantly underperform the market on average in the 12 months after the acquisition. On the other hand, companies which do cash acquisitions were shown to significantly outperform the market. After 6-12 months the dilition of the stock acquisition was factored into the price, and if the acquisition turned out to be a good one the companies did well. Look at the stock price history of this company over the last 7 months, during which time there were numerous stock acquisitions. It sure hasn't been going up. If they leave things alone for awhile, then the benefits of these acquisitions can "filter" to the bottom line, and the stock can start advancing once again. And two additional benefits will happen. First they will build up some cash, with which they can make cash acquisitions. Secondly, future stock acquisitions will be cheaper when made with more valuable stock. Good luck, Carl

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