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Strategies & Market Trends : Fundamental Value Investing

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To: Spekulatius who wrote (932)	7/22/2009 6:01:44 AM
From: bruwin	Read Replies (1) of 4720

LXK Your post ..... Message 25801716 ..... refers. In terms of recent business performance it appears that LXK has not been performing that well. From its last 3 Annual Reports we see a decline of over 11% in top line Revenue, which has, in turn, lead to a severe decline in EBITDA Margin as the CoS and SG&A ratios to Revenue have remained constant. Annual Pretax return on CE has also fallen off by nearly 40% in the last 12 months. And Interest Expense is also up due to recent dramatic increase in long term debt on the Balance Sheet. Looking at their last 5 Quarterlies we see a decline of over 20% in top line Revenue. There has been an improvement in the latest Quarterly bottom line but that’s due, mainly, to a decrease in CoS and its ratio to Revenue. So looking at LXK’s Income Statement history we don’t, IMO, see much in the way that would indicate an overall improvement in their business performance. If that’s not evident then what will make it a current, attractive investment ?

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