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

To: James Clarke who wrote (7820)	7/23/1999 12:29:00 AM
From: TwoBear	Read Replies (1) \| Respond to of 78485

What type of sterilization do they use? Steam, chemical, ultrasonic, they are so many different types out there. We use ultrasonic. I'll check tomorrow on who makes it. Scott

To: James Clarke who wrote (7820)	7/23/1999 12:51:00 AM
From: Michael Burry	Read Replies (1) \| Respond to of 78485

I know, not the typical JJC stock, but I'm intrigued by the business model. And the typical is... I'll take a look at Steris. There are certain companies that just dominate the hospitals. But hospitals are willing to wholesale switch if someone comes up with a cheaper option. I was going to ask you about Mattel. The release was lame. And the last thing I would want them doing is buying back shares. Total debt is way up. Is AR seasonal or a bad sign? Mike

To: James Clarke who wrote (7820)	7/23/1999 8:27:00 AM
From: Madharry	Read Replies (1) \| Respond to of 78485

Sounds like you still like Clayton! Whenever you are this confident about a stock it has worked out well over time. Re Mattel I read a very unflattering article about Barad in the WSJ awhile back which implied that she made her name with Barbie and and went down with the same ship. Did not imply that she had what it would take to transform and redesign this company. I would probably buy Delta if I were buying an airline. Having used Priceline I realize that the major benefit is to Delta as it allows it to segment its market more and thus increase profitability. I sold the balance of THQI perhaps prematurely, just did not like the sell off after earnings. ALSC may be a bigger bargain after today depending on how the market responds to its mediocre operating results. Yet ALSC represents a cheap way to get into the Taiwanese foundry business, anything else they do is a bonus.

To: James Clarke who wrote (7820)	7/23/1999 11:33:00 AM
From: Q.	Read Replies (1) \| Respond to of 78485

re. Steris (STE), the co. looks good. The valuation looks good, but not incredibly cheap. here's a marketguide report: Steris Corporation SYMBOL: STE EXCHANGE: NYSE PRICING DATA (AS OF) 07/16/99 RATIOS & STATISTICS Price 18.94 Price/Revenue (TTM) 1.68 52 Week High 35.88 P/E (TTM) 15.76 52 Week Low 15.13 Price/Book (MRQ) 2.95 Beta 0.71 Price/Cash Flow (TTM) 11.32 Avg Daily Vol (10 Day) 0.40 Mil ROA (TTM) 10.57% Avg Daily Vol (3 Month) 0.77 Mil ROE (TTM) 21.40% Current Ratio (MRQ) 2.50 DIVIDEND INFORMATION Total Debt/Equity (MRQ) 0.51 Indicated Annual ($) 0.00 Yield 0.00% NOTE: TTM = trailing twelve months MRQ = most recent quarter SHARE RELATED INFORMATION SHORT INTEREST INFORMATION Market Cap. ($) 1,274.016 Mil Current Month 2.600 Mil Shares Out. 67.273 Mil Previous Month 2.783 Mil Float 57.900 Mil Short Interest Ratio 4.1 Day INSTITUTIONAL & INSIDER OWNERSHIP PURCHASES SALES NET PURCH %OWNED Institutions (3 Months) 17.863 Mil 17.147 Mil 0.716 Mil 90.8% Insiders (6 Months) 0.000 Mil 0.454 Mil -0.454 Mil 13.9% BUSINESS SUMMARY STE develops, manufactures and markets, infection prevention, contamination prevention, microbial reduction and surgical support systems, products, services and technologies for healthcare, scientific, food, research and industrial customers. For the FY ended 3/31/99, revenues rose 11% to $797.6M. Net income rose 30% to $84.9M. Results reflect higher sales of capital equipment, consumable products and equipment and an improved gross profit margin. REVENUES (Thousands of U.S. Dollars) QUARTERS 1996 1997 1998 1999 JUN 120,871 127,868 155,134 173,775 SEP 132,268 138,490 173,383 191,125 DEC 163,623 151,005 186,639 205,794 MAR 117,850 170,489 204,500 226,917 TOTAL 534,612 587,852 719,656 797,611 EARNINGS PER SHARE JUN 0.135 -1.080 0.170 0.205 SEP 0.105 0.165 0.220 0.270 DEC 0.250 0.190 0.260 0.330 MAR 0.100 0.225 0.290 0.410 TOTAL 0.590 -0.500 0.940 1.215 8/98, 8/95, 2-for-1 splits. Fncls. prior to 6/92 are pro forma. Increased shs reflect the 5/96 pooling of interests merger of AMSCO. FY'95 & FY'96 restated for AMSCO merger COMPANY COMPARISON TO THE HEALTH CARE AND S&P 500 AGGREGATES COMPANY INDUSTRY % S&P 500 PROFITABILITY RATIOS: Net Profit Margin 10.64 3.25 327.4% 11.23 Return on Equity 21.40 7.05 303.6% 22.06 Interest Coverage 12.70 4.29 296.2% 8.36 VALUATION RATIOS: P/E Ratio 15.76 24.57 64.1% 37.12 Dividend Yield 0.00 1.04 0.0% 1.20 Price to Tangible Book 5.65 6.67 84.7% 11.99 Price to Book 2.95 2.64 111.9% 9.19 Price to Free Cash Flow -104.05 42.52 -244.7% 45.34 FINANCIAL STRENGTH RATIOS: Current Ratio 2.50 1.97 127.4% 1.49 LT Debt to Equity 0.51 0.85 59.9% 0.85 Total Debt to Equity 0.51 0.93 55.2% 1.04 GROWTH STATISTICS: 3 Yr Rev Growth 14.27 30.37 47.0% 15.07 3 Yr EPS Growth 27.13 6.86 395.3% 15.57 3 Yr Div Growth NM 4.19 NM% 10.75 Reinvestment Rate 100.00 96.79 103.3% 70.62

To: James Clarke who wrote (7820)	7/29/1999 2:12:00 AM
From: Michael Burry	Read Replies (3) \| Respond to of 78485

Re: Steris I won't buy it. Why? As I was leaving the OR today I took some time to look around. Yes, I washed my hands with Steris soap. Yes, the equipment is here. But there's something else. A little flier on a board that I rarely stop to read. Listing all the trials that they are doing with different products. Trying to switch suture brands. Glove brands. Soap brands. Even different equipment brands. And at the end of each entry was something to the effect of "We will save $xx,xxx per year if we switch." They are willing to switch this or that to save literally $30,000/year. In an enterprise that does $300M/year. I learned different types of suture by their brand names. When I want a 4-0 Vicryl, it was like I didn't even know that was a brand name. It was just what it was. Now it's going to be something else. I can't remember the name. Brand names carry no power in this environment. And hence IMO ROE that even for ten years or longer has been stable is now in danger if it belongs to a medical supply or equipment company. Really, no one is going to cry when the Steris soap in the bathroom is changed to something else. And the cost-cutting will hit the bathroom. Over time, it will play out this way. And instead of fancy dinners persuading physicians and hospital admin to buy this or that, it will be the bottom line. I think this is coming to a head now (not that the pressure will subside) in the medical equipment/supplies arena, and disasters will occur in big names. With Steris you are buying a name and a brand. And products. But if the products can be duplicated by a no-name, this is going to become a hard road. It appears undervalued by current numbers. But remember how much of the stock value is carried in that post-10 year residual value? Well, that is part that is very shaky. Mike