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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (5066)	4/20/2000 3:08:00 AM
From: jbe	Read Replies (2) \| Respond to of 19428

>>They all have tons of debt and poor returns on equity on paper thanks to up front costs and depreciation.<< Dale, you are right that DISH and PGTV are comparable. But you forgot to add to the above: "thanks to the fact that they are losing money." A progressively worse earnings performance year over year, not capital spending (which DISH has actually cut back in recent years), explains why ROA, ROE, and ROI are declining so fast. The interesting thing is that in both cases there is a direct inverse correlation between positive sales growth and negative eps. Otherwise put, they are losing money on each customer. So the more customers they get, the more money they lose. PGTV's negative earnings look worse than DISH's this year only because PGTV's revenues grew faster. Meanwhile, to cover the real costs of business, they have to borrow. Each year they borrow more and more. The DISH debt situation is even worse than PGTV's (although they both get an F from Morningstar for Financial Health). In 1995 DISH had a debt load of $416 million; in 1996, it had grown to $875 million; by 1997, it was $1,365 million (over a billion, in other words); in 1998, up to $1,488 million; and in 1999, it hit $3,038 million. Reporting services do not give any debt/equity ratio for DISH; it is listed as NMF - Not Meaningful. It's not meaningful because there is no equity left! If that is "managing debt," then I'm the Queen of Spain. <gg> "Growth" is okay, I guess, but growth at what cost? There is such a thing as expanding too fast. For example, the landscape is littered with the corpses of retail chains that went on a bankrupting spreee of store-openings (which is what the Wall Street analysts wanted ANF to do, according to Motley Fool). The way I see it, companies like DISH and PGTV are doomed to end up in the same state; their only salvation. IMO, would be a takeover. I hope they're praying for that. You're right, I don't know the business, and no doubt I am missing something here. But I sure know what it's like to live one jump ahead of the bill collector, not to speak of the taxman! So DISH and PGTV have my sympathy... Although I apparently shorted the wrong one, doggone it! DISH was down almost 10% today! jbe