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Strategies & Market Trends : Value Investing

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To: James Clarke who wrote (2970)	1/8/1998 12:03:00 AM
From: Michael Burry	Read Replies (1) of 78753

Medusa Corp (MSA) Has pulled back 20% from this year's highs, but remains a very well run and low-cost producer of concrete and mineral supplies to the construction and agriculture industry. ROE has been about 40% over the last 5 years, now trading at about 6.7 times trailing operating cash flow. Much recent capital investment in distribution should pay off, along with 3 1997 acquisitions. Is # 1 in several of its segments, though the market is admittedly highly competitive and fragmented. This really means more growth for the low-cost producer, which Medusa is. Debt/equity of 0.2, current ratio > 2. With housing starts up, may be a way to play a dual-sided economy (where multinationals and techs suffer while US basic materials companies thrive on the rate-inspired construction growth). The stock hasn't done much in the past year, but long term trend is very much up. Mike PS I agree with James - I wouldn't invest in a brokerage in this market. That's not to say JWC won't do great. But I would be a nervous wreck holding a brokerage now.

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