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

To: James Clarke who wrote (8686)	10/19/1999 2:09:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78644

Thanks for the feedback. I'm surprised to see that such a large auto/truck supplier like DCN has put together such very nice numbers over the past few years, especially a high ROE. Increasing the dividend. PE is low, which I would expect. I'll look closer. Paul.

To: James Clarke who wrote (8686)	10/19/1999 11:51:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78644

Jim, on Dana (DCN). Well, I don't like it. However, it's not a matter of what I like and don't like. Or so I keep telling myself. It's about what works and what doesn't. Dana is way too diverse and too industrial for me to evaluate its specific businesses. It sells "stuff" that goes inside of car/truck engines, and "stuff" that goes under cars and trucks. A business that just doesn't seem to appeal in 1999. DCN seems more like a '60's stock - if it ever was even then. A company with many competitors and perhaps just a few big customers. And a cyclical business too. Maybe now we're close to the top of the auto. or economic cycle. DCN earnings will be down next year, and the stock has been hit today by a number of analyst downgrades. Two strategic goals of the company are to diversify sales more internationally vs. their domestic exposure, and diversify their customer base (replacement market vs. new). Plus develop more "other" businesses vs. auto/truck. How successful they may be is difficult for an outsider to speculate. I see no "catalyst" for this company. Nevertheless, I've started a very small position in DCN today at under $28. Company's past financials and performance show some very good numbers, imo: There's high ROE (4 of past 7 years above 21%); increasing book value; and relatively low price to sales compared to previous years. I see 6 years of increasing dividends; a large cap company with a relatively high dividend (over 4%); increasing long term debt but debt/equity is generally decreasing; and low relative pe compared to past years. This company seems like it would hold very little interest for investors- value or not. But for me, within a diversified portfolio, one focused on growth and income, the stock could work out okay over a couple of years. (Aside: purchased DCN with some funds generated today from selling last year's purchase of the maintenance supplier/distributor Grainger (GWW), which no longer qualifies as a value stock, imo) Paul