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To: James Clarke who wrote (2551)	6/18/2000 1:07:00 AM
From: Freedom Fighter	Respond to of 4691

James, My preliminary valuation on GPC is exactly the same as yours. I never looked at until today so I have a lot to learn, but I like what I see so far. Wayne

To: James Clarke who wrote (2551)	6/18/2000 2:40:00 AM
From: Michael Burry	Read Replies (1) \| Respond to of 4691

Re: GPC, you said, "but they've got to stop their margin deterioration to get there. They will." What makes you think so, other than history? I like the company and have been watching since you first brought it up, but I'm waiting for business and share price stabilization first. It looks like it could test its lows. In fact, I happened upon this sell-side review, which sounds a lot like something I would write: Initiations of Coverage Genuine Parts Co. (GPC - Quote, Broker Reports) Neutral Price Target: $26 Initiate Coverage with a Neutral Analyst: Eric Goldstein - Auto Parts We initiated coverage on GPC with a Neutral. GPC has diversified from its core automotive parts distribution business into industrial parts, office products and electrical/electronic materials. GPC has become a distribution consolidator that operates in fragmented, mature markets where achieving economies of scale and asset and labor productivity are critical factors in creating shareholder value. GPC's margins have succumb to price deflation, parts proliferation, intensifying competition from national retailers, extended warranties on new cars, and higher quality. GPC has also used its balance sheet to acquire companies to help sustain its growth rate. As a result, over the past decade, most balance sheet ratios have deteriorated, translating into EPS growth at the expense of ROIC. The current compensation system is too heavily weighted toward pretax profitability. If the compensation system was modified to emphasize long-term ROIC, shareholder value would be greatly enhanced. We could turn bullish on GPC if it could demonstrate a sustainable trend of improving asset efficiency as substantial margin improvement should be difficult to attain. GPC- a long-time bellwether in the automotive after-market with consistent earnings, cash flow, and dividend growth - has fallen out of favor, in our opinion, due to its declining ROIC and management's refusal to take significant action. Given the challenges facing the business, we believe that GPC is fairly valued. Our formal price target is $26, valuing GPC in line with its peers. GPC has a safe and attractive dividend yield of 4.3% that may appeal to income-oriented investors. Mike.