PAIR has once again appeared in Smart Money - January '99 edition.
On page 80, the stock screen lists 8 stocks (PAIR, ADPT, FLE, KBALB, PHSYB, SFA, SKYW, VLSI) that are "cheaper than they appear because they're holding lots of cash". Here's a blurb from the article: ". . . the stocks in this month's table, companies flush with cash, a 'hidden' asset that makes them look like bargains. But even though I'm saying nice things about these stocks, don't rush to buy them--particularly if you must sell something else to get the funds. . . .I looked for modestly priced, profitable companies with minimal debt, estimated earnings growth of 10% or better and a bank balance that's at least 20% of market value. My eight finalists are firms with cash that averages 35% of market value. So you can buy the earning power of these business at a fat discount.
Sure, there's a counterargument. Critics see idle cash as a negative, evidence that mangement isn't using assets effectively. There's no definitive study of this question, but most value investors disagree. Cash-rich companies can be opportunistic, make acquisitions, even buy back shares. Finally, when things get tough, there's a floor beneath prices--which rarely fall below a firms's net cash value."
The specific mention of PAIR (other than the listing in the table) is as follows:
"PairGain, which speeds Internet access over copper wires is regularly cited as a takeover candidate."
Happy Holidays.
BG |
