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Strategies & Market Trends : Value Investing
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To: Lazarus who wrote (59749)8/22/2017 6:48:17 PM
From: Graham Osborn1 Recommendation

Recommended By
E_K_S

   of 78753
 
I've looked at a number of retail plays mentioned on this thread and elsewhere. Many give the impression of being tremendously cheap. What usually gets me in the end is the operating leases. My loose rule of thumb is I don't like LT obligations/ tang book to be more than 1, and the leases wipe out tang book completely in some cases. Years ago (i.e. about 20 years ago) there was a big debate here about whether operating leases and LT debt should be treated similarly. I can say that for my part I do treat them similarly, and it would seem right now that the market is doing the same.

Perhaps there is hidden value to these leases outside retail.
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