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Non-Tech : SPIN-OFFS "secret hiding places of stock market profits" -- Ignore unavailable to you. Want to Upgrade?

To: valueminded who wrote (333)	8/6/1999 2:36:00 PM
From: Stewart Whitman	Read Replies (1) \| Respond to of 1185

Chris, On TEN, you really have to look at the cash flow statement - they have a huge amount of depreciation and amortization to write off. On the debt, if you take (operating earnings+depreciation)/(interest payments) you'll see its in the range of 5x, which, for me, means that the debt levels are OK. Also, some debt will be repaid by the sale of the containerboard interest ($300 million I believe). I'm valuing auto-parts business around $8-$10 based on sales comparisons to similar companies. I'm valuing the packaging business around $21. The packaging business valuation is based on 10x EBITDA-interest and taxes (about $350 million/year by my calculations). Those are reasonably conservative numbers for the valuations in my opinion - they don't give any credit for outstanding brands in both businesses, so there is substantial upside. I suspect I'll be buying more of the packaging company after the spin-off based on the current valuation. Regards, Stew