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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Cautious_Optimist who wrote (57692)	7/2/2000 2:50:35 PM
From: EightyEight	Respond to of 122087

Is this relevant? Berko on Conseco: CONSECO Hold, or Bail? PUBLISHED: June 28, 2000 Dear Mr. Berko: What are your thoughts on Conseco? I bought 300 shares at $16 and it now trades at $6. Should I buy another 300 and average down? SN: Erie, PA Dear SN: Conseco (CN-$5.50) made a monumental goof in 1998 when its shares were trading in the mid $50s. Arrogant with success and believing they were among the privileged few to sit at the right hand of God, management paid $6 billion for the purchase of Green Tree Financial (GNT). CNC paid a hugely rich premium for GNT (a sub prime lender) and soon thereafter discovered that GNT’s balance sheet had many of the properties of Swiss cheese. Well, management got caught with their collective pants down and CNC’s stock began a deep, full-bodied decline. GNT hurt Conseco, decimated its balance sheet and so destroyed CNC’s credibility with the investment community that management’s only recourse was to blow it off the books. Consequently management is considering an offer of $750 million from Lehman which translates into a $5.25 billion loss. CNC used to be a classy health and life holding company, with its ownership of Colonial Penn, Washington National, Pioneer, Banker’s Life, National Fidelity, Jefferson National, Beneficial Standard, Great American, Lincoln American, American Travelers, Transport, Massachusetts General, United, Continental Wabash and others. And since 1992 revenues increased 6-fold while net income and the stock price exploded…that is until 1998 when GNT sold CNC’S management a pig in a brown paper bag (poke). CNC, which is the or 8th largest insurer in the U.S. has made an unholy mess of itself in the past 18 months. Its CEO, Stephen Hilbert was recently resigned with a $72 million severance package, exclusive use of the CNC corporate jet twice a month plus a few other amenities. However, it’s often said that the time to buy a stock is when no one wants to own it. CNC’s short interest of 44 million shares represents 18% (really high) of its float. The company’s book value (according to S&P) is about $3.25 a share, its portfolio of insurers is really top drawer and First Call Financial expects CNC to earn $2.00 a share this fiscal year. That’s good. So good in fact that several groups including financier Irwin Jacobs, Lehman Brothers and a consortium of European investors are considering bids for the company. CNC has some exquisitely beautiful assets and certainly the sum of its various individual insurers (the parts) is worth a lot more than the whole. There are eleven analysts on the Street who follow CNC. Two analysts rate CNC as a “strong buy,” two rate CNC as a “buy” and seven rate CNC as a “hold.” Because CNC has significant cash flow, because CNC has an impressive portfolio of insurers and lenders and because CNC has an established franchise, I also rate the stock as a “strong but speculative buy.” And I’d even go a step further. Buy the common shares but I’d also like you to consider its $2.29 preferred (CNCT-$11.00) which yields 21%. In my opinion, CNC’s cash flow can easily make the payments. And if there’s no buy-out, but rather an improved credit position, the value of the preferred will skyrocket and you’ll still earn a juicy and bankable 21% current return.

To: Cautious_Optimist who wrote (57692)	7/2/2000 5:15:41 PM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 122087

John Einstoss true: " Squeezes are of relative merit ". In the case of Conseco for me, the squeeze is the frosting in the cake. Look at eighty eight's post below: Conseco, Hold, or Bail? Message 13985283 That's why I bought it. First off however, the No 1 reason i bought it is because of Gary Wendt: Companies are their CEOs, very often. Look at Crisco: it would never had gotten there without John Campbell. The day he goes CSCO will tank several points, trust me on this. The other reasons are all illustrated in eighty eighty's nice review. -Top portfolio :ownership of Colonial Penn, Washington National, Pioneer, Banker’s Life, National Fidelity, Jefferson National, Beneficial Standard, Great American, Lincoln American, American Travelers, Transport, Massachusetts General, United, Continental Wabash and others. -And since 1992 revenues increased 6-fold while net income and the stock price exploded…that is until 1998 when GNT sold CNC’S management a pig in a brown paper bag (poke). BTW if every investor in SI on Monday buys 1000 shares only a small number of 50000 investors will have bought 50000000 shares and start a short panic situation. So it will not take too many people to get the price up. Can you say Happy July 4 Th?? <vbg> cheers TA PS: Perhaps the CONSECO discussion should take place in the CNC SI thread. Any thoughts? back later, TA