Safeguard Scientifics SFE Message Board

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Technology Stocks : Safeguard Scientifics SFE

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To: Hepps who wrote (4465)	1/5/2008 10:48:22 PM
From: Tom Caruthers	of 4467

Hi Hepps, I don't know much about ACAS ($31). I looked at their last 10Q and they have the majority of their investments with a FMV near cost. Although it's common to be very conservative in estimating FMV for private companies, I would be concerned if the portfolio was old as it would suggest that their companies are not making good progress. One problem could be that ACAS is siphoning off cash from their portfolio companies at very expensive rates of 10-15%. Companies that are willing to take on that kind of expensive debt are usually struggling to begin with. All this suggests that the risk of major write-offs is real. So the short-term gain of a 12% annual dividends will likely be countered by a longer term down trend in the share price. The chart suggests that ACAS will see $28.5 soon, so I would be hesitant to get in right now. Good luck! Tom

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