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 (9329)	12/16/1999 1:23:00 AM
From: Marc Fortier	Respond to of 78517

I had a look at two stocks fundamentally attractive lately: BEBE and FUN. FUN was a suggestion of Peter Lynch in Barron's in 1992 if my memory is good. The valuation and the yield is attractive. Better still, FUN has made an acquisition this year, which should add to earnings and dividend next year -- just as it had when Lynch had made his recommendation. BEBE is a retailer with lots of potential (spectacular growth and still a lot of room to expand) and very good management -- if you look at numbers like ROE and ROI. The balance sheet is also very strong. Any opinion you guys? Any opinion

To: jeffbas who wrote (9329)	12/16/1999 1:52:00 AM
From: Michael Burry	Read Replies (3) \| Respond to of 78517

Centex: I just took a position two days ago at 23 1/2 as it hovered near lows, 50% off highs, with big insider buying with more diversified business structure than just a homebuilder or just a manufactured home maker. Then I sold today at 22 3/4. Yep, my "new lows" rule kicking in. I wonder how low it will go. I may regret selling. But so far this year, all I know is that I haven't regretted it even once when I've followed this rule in our beloved value sector. What did I replace it with? For now, it's Crane (CR), which I bought at today's high (18 3/8). Jim likes it, and Mario Gabelli just pitched it this morning on CNBC. Great ROE and ROIC for its industry and at all-time low valuations. Its cash flow is much higher than its accounting earnings. But the last time valuations got this low the shares hit a 3 year go-nowhere patch (early 90's) in which earnings hit a rough spot. There's also a spin-off coming up. It just seems very cheap and very safe as a longer-term hold, out of which I'd expect about 17% annually after-tax if I could hold for 10 years. Mike

To: jeffbas who wrote (9329)	12/16/1999 9:07:00 PM
From: James Clarke	Read Replies (1) \| Respond to of 78517

re: CTX <<I would tend to prefer this to CMH as its industry is suffering less.>> I the words of our great president Bill Clinton, "it depends what the meaning of the word is is". Clearly the market is anticipating that CTX is about to suffer some pain, with interest rates rising. Can homebuilding get any better? Clayton's economics are very different from Centex's. 50% of their income is recurring, whatever the environment. Clayton is not recession proof, but it suffers a lot less than a Centex unless I'm missing something big. Both may be great investments, but if I have to pick one there is no question what that would be. What did Centex do in the last recession might be a good place to start. You might also look at what Clayton did in the last recession. I think you'll see a difference. If you want to compare the valuations, I would suggest you use mid-cycle earnings power, not trailing earnings which might very well be the peak for both. But the mid-cycle adjustment for Clayton is much less drastic than the adjustment for Centex. Maybe the answer is none of the above. Time will tell.