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Strategies & Market Trends : Value Investing

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To: Axel Gunderson who wrote (4845)	8/28/1998 11:37:00 PM
From: Paul Senior	Read Replies (3) of 78594

Axel Gunderson: re distributors. Don't mean to be on your case, just that I can't figure out where you are coming from. Avnet is not cheap --IMO. Maybe to where it was, but not to where it might go or to the history of distributors. Here's my clue to tell when distributors are cheap: NO distributor is cheap unless it sells below book value. After all we are talking about companies that essentially distribute somebody else's stuff (even if they do use sophisticated billing, inventory, distribution to do it. So the ROE they can earn is limited by and related to their book value). This confluence (price<bv) does occasionally happen. From what I see (and I'm not following all the players) the only sorta cheap co. is Marshall (MI), and in this market, it still doesn't tempt me. Paul Senior

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