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

To: Freedom Fighter who wrote (1624)	6/25/1999 11:23:00 PM
From: James Clarke	Read Replies (2) \| Respond to of 4691

The other equity stake is far bigger than the IBC stake. Ralston owns 22.5 million shares of Dupont. That's $1.5 billion out of a $9.5 billion market cap. IBC makes up another $650 million, even though the stock is down a lot. But the reason I am attracted to Ralston Purina is the pet food business. I contend that this is a Buffett business. 1) Consistent and very high return on capital 2) Non-cyclical 3) Repeat purchase 4) Consumers don't switch brands 5) Ability to raise prices over time I do not like the battery business nearly as much. But Ralston is spinning it off. In fact, five years ago they owned several more mediocre businesses and they have sold or spun them off one by one. Finally we are going to be down to a pure play on a great business. The financials are quite difficult to sort out, but I think $29 implies a high teens P/E multiple on the battery and pet food businesses combined, after backing out the Dupont and IBC holdings. I want to own the pet food part of this. The question is whether I buy the stock now, wait for the spin-off, or put it on my market crash list. JJC