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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: jeffbas who wrote (7458)	6/8/1999 12:57:00 AM
From: James Clarke	Read Replies (1) \| Respond to of 78651

Steelcase...no catalyst. Clayton Homes...no catalyst. I agree fully. I like catalysts if they're free. They usually aren't. And I don't know what you'd want as a catalyst on Clayton. This shareholder has no desire for a change of management or a takeover. Clayton as is earns 17% on equity year in and year out. As long as earnings continue to go up 12-15% every quarter, I am very very happy to own a small piece of the business. In time I will be well rewarded for that, and I bet it will happen way too fast for those waiting for catalysts to participate. Steelcase is another story. This is one where you want to watch for catalysts. You correctly pointed out the biggest issue with the stock. 90% of it is owned by insiders - there is no liquidity for institions to buy, so they pass it by. This is one of the rare cases where a secondary offering would be a positive. If you want to follow Steelcase and look for things to change, just watch return on capital. The reason I own Steelcase is that I think return on capital should double, which still would trail the level of its competitors (HNI, MLHR). These two are excellent companies, and value investors, especially of the Buffett variety should be calling and ordering their annual reports. But Steelcase is #1 in the office furniture industry. There is no reason why they can't earn the same return on capital once they get the discipline of being a public company. There is nothing wrong with management - now they have new incentives. And if that happens, the share price triples. This is a 3-5 year investment for a triple. You heard it here first. JJC

To: jeffbas who wrote (7458)	6/8/1999 1:17:00 AM
From: Michael Burry	Read Replies (1) \| Respond to of 78651

Jeffrey, re: SCS I just love your rhetorical Q's! A catalyst for a higher price may be if the CEO can indeed double revenues by 2003 and in doing so bring earnings along with them, no? ;0 I don't know if I believe it. I didn't realize, or maybe I'd forgotten - I'd have to check my notes- that insiders owned 91% of the stock. But I agree with you that such a high percentage would increase the risk of going private in the event of a share downturn, and hence a permanent loss of capital. This should depress the multiple. I too don't know that it will ever command a higher PE. Probably will have to rely on earnings expansion rather than multiple expansion. Much like Champion or Borders, as I said. Mike

To: jeffbas who wrote (7458)	6/8/1999 1:34:00 AM
From: TimbaBear	Read Replies (1) \| Respond to of 78651

The two main catalysts for the manufactured home industry are interest rates and Mother Nature....High Interest rates force low income people to buy more manufactured homes because their price point still allows them to qualify for the mortgage. Mother Nature destroys a lot of manufactured homes....lowest cost land is often in low-lying, flood-prone areas; and tornadoes and hurricanes tear them up more easily than a block home....I used to sell manufactured homes, lived in one, was a finance manager for a mobile home dealership, hold a mortgage on one now, so I've got a passing familiarity :~}....I live in Florida and the predictions are for 50% more hurricanes this year than last. I have been out of the business for about 7 years now, so I don't know how Clayton stacks up against some of the others as far as retail presence....Redman Homes and Nobility Homes seem to have a lot of volume down here.