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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (19212)	5/17/2004 8:54:16 PM
From: Bob Rudd	Read Replies (1) of 78702

Paul: Looked at RSC. The multilples are very attractive - especially at P/FCF. Nevertheless they are an electronics/appliance retailer - a small one competing against biggies, hoping focus on small communities will protect them. It's not...just slowing the decline. Revenues declined 5% annually over the last 2 years while industry leader BBY rose 10+% over same period. WMT, BBY & online competitors are nibbling away at these guys market share. Insider selling at what appears to be attractive valuation confirms that this is a business in decline. Sure the cashflow looks good - it often does in early stages of decline, but it too will follow earnings and revenues down the drain...insiders recognize this and are bailing. Technically, a 5+ year trendline appears on the edge of being broken.

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