Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Roger A. Babb who wrote (1162)	1/22/1998 12:52:00 AM
From: Brad Davies	Read Replies (3) of 18691

Roger, I have noticed your comments regarding WDRY. When you first brought it up here, I took a look. It seems to me that your main argument for shorting this stock is their excessive leverage. I can tell you, from first hand experience, that the apartment coin laundry business is a very good one. Revenues are very predictable. You can usually count on betweem 10 and $20 per suite per month, depending on the suite size (that is an indicator of suite population). The company would then have to pay the landlord some percentage of the gross, or some other form of compensation. In my view, provided interest rates are favourable, this is a great business to lever. On existing revenues, the company could almost be priced like a bond. I have no position in WDRY. I thought about going long when I first looked at it a month ago. I think there are much better shorts out there. Good Luck. Ron

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