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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: valueminded who wrote (68594)	10/4/1999 9:40:00 AM
From: Freedom Fighter	Respond to of 132070

Chris, I agree with you about Flowers/Keebler being highly leveraged. It's the one thing about the position I do not like. On the other hand I am less worried about a leveraged food company than I am about most other businesses. Most good food brands, including Keebler's and Flowers', can earn money with a highly leveraged balance sheet because of the value of the brand. You are not getting tangible value. You are getting the excess return on capital that a good brand can generate. I'd prefer less debt no doubt though. You make a good point about the value of Keebler too. I'm not sure what Keebler is worth. It does seem to be making great strides in getting its act together so I'm not convinced it's overvalued either. The price may be quite reasonable based on its current earnings power. I think it's definitely a valuable brand. All in all I think there's value there. Wayne