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Strategies & Market Trends : Value Investing

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To: James Clarke who wrote (2408)	11/9/1997 11:27:00 PM
From: Ron Bower	Read Replies (1) of 78626

James, Not to disagree with you on WHX because BV is likely understated if anything. I feel caution is necessary when referring to earnings. Past earnings have been sporatic and the pre-strike earnings did not indicate major strength. Two factors work against them: most steel companies are not reporting substantial profit growth in spite of not having WHX as a competitor and Wheeling must convince customers to leave current suppliers and come back. Much of the BV was generated thru past earnings and recent sales of assets, not recent year earnings. The stock is definitely undervalued on an equity basis but they are also issuing another $350M of debt that brings their debt to asset level over 50%. I'm not arguing against buying, just urging caution. To quote a post on another thread, 'not to look at a stock with rose colored glasses'. Lot's a luck, Ron

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