Bombay (BBA): Time for a run up? Message Board

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Non-Tech : Bombay (BBA): Time for a run up?

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To: Arnie Doolittle who wrote (20)	9/2/1997 2:13:00 PM
From: Stephen Steir	of 202

Arnie, forgive me for implying that an index fund is the right way to go. I enjoy thinking for myself, find it fun as a matter of fact. The largest chunk of my portfolio is invested in a small company I think you may have heard of. Its symbol is NXTL ;-) I must admit that I've never been to a BBA store but I have been to Pier 1 Imports. Based on what I've read and heard now I believe that they are quite similar. Please correct me if I'm wrong. Specialty furnishings will do well only if priced to attract the "mall crowd". Bed Bath & Beyond is one such example. TJ Max begins an experiment in home furnishings this fall. Both chains push value and selection and rely on volume more than margin. What is different about BBA's new offerings? Are they priced to compete? What of margins? They haven't been on the ball in the past five years; what's different about BBA's mangement? With regard to taxes, I like to hold long. Pier 1 Imports has been doing well in the specialty market for quite some time yet is only expected to grow 16% per year over the next five years according to First Call. I believe that an S&P index fund will outperform PIR over that period with much less risk, imo. I'm not saying that the best gains are found in index funds, I'm just giving an example of a low risk alternative to PIR. BBA's long term picture is much less rosy than PIR's based on past performance. Also, study PIR's charts over the last five years and you'll see the company track consumer confidence trends quite nicely. If you believe that consumer confidence will remain high through the holidays and that the new product offerings will turn BBA around then I think you have a good short term possibility (less than nine months) with a bunch of risk and no long term tax relief. Steve

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