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Non-Tech : Bill Wexler's Dog Pound -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (5797)	12/30/1999 2:55:00 AM
From: Bill Wexler	Read Replies (2) \| Respond to of 10293

Quite honestly, SFP bothers me. I'm really scratching my head over this one. i took a look at the last 10-K and nearly went crosseyed trying to decipher all the machinations with the convertibles. Several disturbing items: 1) $250 million in debt is awfully hefty for a small appliance company. And one must wonder about quality of earnings when you look at the cash flow, cash position and disturbingly high receivables. 2) Doesn't it strike you as odd that they would pay George Foreman $140 million for the right to use his name in perpetuity? Foreman is a nice guy, but he ain't no Jordan or Ali. I'm also a bit dubious about just how many little George Foreman grills are selling through. I'm not an expert on appliances, but my guess is that a second-tier athlete's endorsement really doesn't mean much when it comes to food-preparation machines. 3) Top line growth isn't all that hot. It seems this company grows through acquisitions, issuing converts along the way. Quite frankly, none of their product lines strike me as super-hot category killers...and their gross margins aren't really eye-popping. The Toastmaster line seems to be doing OK. 4) Yeow...half the float is shorted!! This could make for an interesting squeeze - or a spectacular blowup like Sunbeam. 5) I'm a little leery of the all the enthusiastic "strong buys" especially considering the risk and fickleness of the small appliance industry. Seems like a little investment-banker log-rolling. But what do I know? In this market, the stock could ramp 100 points in an afternoon. I'll stick to my unwieldy Berkshire with the past-his-prime, non-tech, old-school, can't-make-a-buck-in-this-market-while-garage-mechanics-are-getting-rich-rich-rich-by-daytrading Warren Buffett.