Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: jeffbas who wrote (8595)	10/11/1999 10:51:00 AM
From: Mike 2.0	Read Replies (4) \| Respond to of 78748

All, has anyone noticed that for this thread to take notice of a company like XRX, the company first has to step in dogsh*t? If XRX executed and performed well and as expected, it's stock would not have been wounded and never would have been up for consideration by "value" investors. More and more I feel like "value investing" (or my value investing anyway) is more like a spendthrift at the grocery store, who dotes over the damaged goods corner, buys a dented can of food that is selling at a discount, calling it a "value"...only to end up in the ER for samonella! FWIW...hope this is not flame bait

To: jeffbas who wrote (8595)	10/11/1999 11:23:00 AM
From: Paul Senior	Respond to of 78748

Jeffrey, LOL! Apt analogy. Well, in this market, for those of us who have been around a while -g-, "should" as in what pe multiple should a cash cow sell for, that is a tough question. I'll say 10-12, which would give an earnings/price ratio 8-10%, somewhere maybe around an 8% gov't bond. I'd prefer a multiple closer to 6-8, but then that would mean that the cash cows are way overpriced for this market. For Xerox, if it's a cash cow, Xerox managers don't see it that way. Sales increased only about 20% over 6 years or so, while managers doubled the long term debt, (And they let shares outstanding increase a little too.) If I put a multiple of 10 on recent best year's earnings I see ($2.02 in '97), I would pay mayb $21 per share. Also then,the current .80 div. would give a yield of about 4%. To me, that's pretty fair in this market for investors in a "cash cow". Good thing for Xerox stockholders that not many investors see it like I do. (i.e. that the stock @$31 is still overvalued by 1/3) Paul