Bill Wexler's Profits of DOOM Message Board

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Strategies & Market Trends : Bill Wexler's Profits of DOOM

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To: Bill Wexler who wrote (1225)	6/25/1998 9:34:00 PM
From: Bill Wexler	Read Replies (2) of 4634

Briggs & Stratton (BGG) roars on to the DOOM INDEX (tm) BGG is a manufacturer of small gas engines for outdoor equipment like lawn mowers. Nothing wrong with the company and it is a well established brand. Unfortunately, BGG's best days are far behind it. The company is having trouble with new plants, has not had any top line growth to speak of, has missed estimates in several quarters, and real earnings have declined year over year while debt has increased and cash has decreased. Oddly, this company has instituted several stock buybacks (I have the same complaint about Avon [AVP] - why on Earth do they increase debt and buy back stock when the business is coasting or getting worse?) The stock had a little runup last year to 50+ where insiders dumped en masse (they always seem to know where the top is...hmmmm). Last quarter was very disappointing and management was hoping this quarter would be much better - assuming the weather was OK. Guess what....the weather sucked and will probably continue to suck for quite some time. The company still faces a persistently strong dollar and even tougher competition from the Japanese, who will be able to undercut them even more in this low-margin business. The stock has been having a lot of problems over the past few weeks. My guess is that everyone is quietly unloading, not wanting to be around for what are sure to be some gruesome numbers in a few weeks. The stock currently trades in the high 30's. I figure there is a good ten points of potential downside here with nearly zero upside risk (this ain't no Amazon folks.)

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