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

To: Paul Senior who wrote (7862)	7/27/1999 11:08:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78497

Taking a position in microcap ALR: Allied Research. American co., but primary earnings come from a Belgian munitions plant which provides mortar/artillary shells (primarily to Saudi Arabia). Stock trades near its low @ 5 1/2 - 5 3/4. No long term debt. Cash about $2.4/sh (per Yahoo). Book value over $10 1/2. During the past 6 years, they've had 2 losing years. But they can make better than 15% ROE in the good years. Stock is trading just a little lower than its usual psr values. (So not so great a bargain based on relative psr.) Company is profitable (so far -g-) with .27 earnings 1Q '99, down from .48 in '98 (attribituted to lower munition sales). As of March 31, working capital was $37.6M. Market cap for this thinly-traded stock is about $27M. So it's a net-net. I see two significant areas in reviewing Yahoo news: a group of dissident shareholders is trying to take control (seems like they're being beaten back); and some new, perhaps significant contracts have been awarded to ALR (which is good since backlog seems to have been dropping). IMO, except for the fact ALR is teeny-tiny, this is a stock that fits several significant Ben Graham criteria.