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

To: Paul Senior who wrote (9777)	1/28/2000 11:22:00 AM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 78476

I'm smarter than James Clarke, I essentially free-rode on his analysis of USU, but bought my shares at $13.25 instead of paying $14 ($14.25?) like he did ;-) Then, when the shares really went on sale, I bought a bunch more at $12.5-ish. I sure outsmarted him, eh? I'm not able to see how they're going to grow the bus. But, so what if they can't grow the business? And, so what if the business wastes away to nothing in twenty years? If you get enough cash out of it soon enough, you can still come out just fine. At a good enough price, growth is not necessary. The one thing I've discovered that I admit bothers me a bit is that Yahoo! says that their head honcho is paid $2.5M. Perhaps I'm a bit Grinchy, but that sounds overly generous to me. I'm not 100% convinced that management is truly 100% on the side of shareholders. This is my chief worry, that management will be slow or ineffective in properly delivering value to shareholders. I have "figure out USU" on my weekend to-do list. Provided that there's no fatal flaw, it simply looks too good to be true. Perhaps "home runs" always look this scary? Then again, I'll bet strikeouts do too.. - Daniel

To: Paul Senior who wrote (9777)	1/29/2000 1:33:00 AM
From: Marc Fortier	Respond to of 78476

I understand your reasons, and was tempted to take a position for very similar ones, but I already hold a few "special situations", namely: MAT, MO, MSFT, ATYT, PTIX, DCI, TGO and even GBT.a (TSE). I even had CRW (TSE) or CNRM (NASDAQ) lately, but closed that position to switch to BCE. As you can see, all these stocks are depressed right now, except TGO and DCI which are closing to my entry price. On a value basis, MAT and MO don't have to be presented (they sure can be discussed however...). I know that neither MSFT, ATYT, TGO or PTIX would qualify as value stocks, but given the current valuations in high tech, I figure that they are undervalued in relation to the underlying business, compared to the competitors' stock valuations anyway... As for DCI and GBT.a, I really like the former even though it hasn't tested it's high of 1997 yet. I don't doubt that the stock price will move North eventually, given the strong economics of the company. IMHO, it is a great stock to hold for the long-term. If you're interested, have a look at Yahoo!'s forum. Not very active, but the discussion is good. GBT.a is an other story well worth a look. I am quite sure Warren Buffett would love it if he could lay his hand on their annual report. Do you know many furniture companies that have revenues well over 500 million $ (CDN) per year with only 20 stores, in a small market of 8 million people? The comparable in Canada, Leon's Furniture, is far from those numbers with two or three times as many stores, mainly located in a much bigger - and wealthier - region, the province of Ontario. What's more, GBT.a raises its dividend regularly and repurchases shares at a quick pace. Profit margins are improving and ROE too. There is no debt to speak of and about 20 million $ in treasury. P/E ratio is 7.2 on trailing earnings of $2.43. Net profit will probably be around $2.60 for the year (ending December 1999). The numbers were $2.08 for 1998 and $1.67 for 1997. The only draw back besides the very small float: sales growth is slowing somewhat, even though Quebec's economy is doing good. Well, Groupe BMTC will still be very profitable, but the growth will probably slow down until the next recession, which should be good for a company with such a strong balance sheet against weaker competitors. I plan to add to my position along the road. MF P.S.: BTW, Fidelity Investments is a big shareholder (10% I believe) of Groupe BMTC. Oh! I forgot, insiders were regular buyers of the stock in 1999, at prices well above the current valuation.