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Strategies & Market Trends : Value Investing

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To: Michael Burry who wrote (5640)	1/6/1999 7:37:00 PM
From: Robert Hoefer	Read Replies (1) of 78704

For all: Is Novacare (NOV) a value stock? Need balance sheet help! I'm sure that value hounds have noticed Novacare's p/e of 3, p/s of .10, low p/b and record low stock price in the $2-3 range. Is it all too good to be true? I've owned the stock before and like and understand what they do (contract rehabilitation therapy) but their balance sheet is not so easy for me. The current ratio appears to be about 2:1. Seems good. Price to book is low, but how much of their book is tangible, i.e. really worth something? I seem to remember a lot of goodwill from the last time I was owned it. Price to sales would be hard to fake. Earnings are supposed to be okay next year, but they are so hard to predict, I'm not trying. Value investors don't need crystal balls, right? I've heard there are convertible bonds to pay off in the near future and the company could default. That would be a major problem, of course. Its debt to equity ratio is somewhat high. Can they handle all this debt and survive? Anyone who has a handle on the financial condition and value of this company is welcome to speak right up! I'm off to check out www.valuestocks.net...!

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