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Technology Stocks : Speedfam [SFAM] Lovers Unite !
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To: JZGalt who wrote (2610)2/1/1998 6:55:00 PM
From: Michael Burry  Read Replies (2) of 3736
 
The Motley Fool's call this sort of calculation
Enterprise Value.

They're not the only ones! Just about every
sophisticated value investor looks at EV ratios
rather than the standard ratios quoted
in Yahoo and the like. SFAM gets to look
very interesting at a EV/Sales ratio under 1,
but it would be a bargain at under 0.75.
I don't feel all the bad news is out yet on
Speedfam. Intelligent
investors anticipating bad news with a
buy lose money precisely because the
market is slow in seeing what they could see
early on. Partly, this is because a lot of institutional investors
wait for the first missed
estimate before dumping en masse, even
if they anticipated it coming.

sealpoint.com

Go to Strategy - How to Be a Value Investor

Asian demand was an ace in the
hole for Speedfam, and it ain't there now. It
won't be there for who knows how long.
The stock price will anticipate any recovery,
but in the meantime cheaper prices might
be had by patiently waiting for the depths of
despair.

As a former Speedfam investor who sat with
it from 20-->10 in 96 only to sell at 23, I
admit to a keen interest - I want
to buy this stock for emotional reasons, as
I'm sure a lot of others do. EV/sales less
than 0.75 should help sort that emotion
away from my decision. Ken Fisher's book
Super Stocks outlines how this anti-popularity
strategy works.
Good Investing,
Mike
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