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Strategies & Market Trends : Investing for the January Effect 2000 -- Ignore unavailable to you. Want to Upgrade?

To: peter michaelson who wrote (59)	12/28/1999 9:13:00 PM
From: GBT	Read Replies (1) \| Respond to of 109

High tech companies with no revenues are chic right now. Low tech profitable companies get no respect. It is hard to buy low tech right now when money can be made hand over fist on internut stocks, but the day will come when companies like LII will come back. I like the fact that they are buying up to 5 million shares back, 2 million before first quarter ends. Float is only 8 million, and 20 percent of that is short.

To: peter michaelson who wrote (59)	12/28/1999 10:28:00 PM
From: Q.	Read Replies (2) \| Respond to of 109

re. LII's acquisition of Service Experts: It looks like SVE's operations were starting to hurt badly. The prospectus sec.gov shows declining earnings, and it says that their problems led them to shop the company around. It uses phrases like "a further deterioration of Service Experts business" LII was the only offer they got. To be sure, SVE is not about to go BK, but it's easy to see why this acquisition could help drive the stock price down. In fact, the prospectus says it plainly: " The market price of Lennox's common stock declined significantly after the public announcement of the merger and the contemporaneous public announcement that Service Experts' earnings would fall below analysts' estimates for the third quarter of 1999. " One thing I find interesting, in the narrative discussion beginning on page 21 of how the acquisition negotiations were done, is that near the end of the negotiating process, Lennox learned that SVE's business was deteriorating more rapidly, and SVE was expecting to pre-announce an earnings disappointment. Nevertheless, Lennox failed to re-negotiate a more attractive ratio of Lennox stock for SVE stock. I think if I were an LII shareholder, I would be pretty well ticked off about that. The shareholders vote will be Jan. 21.