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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (40157)	11/19/2010 12:48:12 AM
From: Paul Senior	Read Replies (1) of 78464

HEAT. These are not killers for me. HEAT slow to collect payments, too slow given rise in a/r, but customers seem solid industrial end-users from what I can understand. Inventory growth in excess of sales growth is a red flag, yes. I suspect cash reduction means company is using cash to build inventory. That's okay, if they can sell product. My feeling now coming off ACTS is rather than holding cash-rich ACTS where the cash just stays and stays and I don't see any stock gain, I'd rather hold something like HEAT where I have a shot at a gain after they put cash into inventory which they hope sells. Or they issue stock for cash for acquisitions. Company looks to me like it operates in a little niche business in China with growth prospects. Stock should reflect earnings, if they're there.

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