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

To: rjm2 who wrote (11440)	11/13/2000 4:18:28 AM
From: rjm2	Read Replies (1) \| Respond to of 78478

DIYH is looking more & more like a REAL ESTATE play. FACT..they sold the land & building of 2 previously closed stores for $8.6 million. I am told its reasonable to expect the others are worth similar amounts. I was going to discount it, but considering its been a year I think the increase in valuation means no discounting is needed. So $4.3 million x 4.75 stores (sold 1/4 of one)= $20.42 million, less about 2 million for the land on 2 of the stores they dont own = $18.42 million in real estate= $2.53 PER SHARE ! Going ahead and figuring 64% on inventory and adding other assets and cash = $17.171 million, deduct ALL liabilities of $16.375 and the excess is $796,500 or 11 cents a share. So, I just demonstrated how, upon liquidation, there could be $2.64 a share left over. The thing is, its not going to happen all at once. Instead, I expect more closures as time goes by. But, they should have dept paid off soon and while profitability is not likely, I do believe they can run at cash flow neutral at the very least. Then there is always the possibility that they could get down to 4-5 stores, and tweak their mix further and make them moderately profitable. My argument is with the stock at 66 cents, the worst case scenario would yield shareholders a nice return...EVENTUALLY. The fact that the insiders seem to load up everytime shares become available is also a plus. Its always possible that they try to take it private at a lowball $1.25 offer or something... in which case we would still make a good return. I would think it would be very difficult to get a fairness opinion anywhere below $2 however.

To: rjm2 who wrote (11440)	11/14/2000 12:21:01 AM
From: James Clarke	Read Replies (3) \| Respond to of 78478

Second what rjm said about GTSI. That contract is bonus points. Maybe a lot of bonus points. And Jeff, with all due respect, when a guy I consider smart says he would not buy X at any price when a lot of X's are 70% off their highs it really sparks my contrarian instinct. I have been very aggressive on retailers recently and have been making a lot of money off them (ANF, SYM, a couple others). In my personal account I shorted Kohls at 60 times earnings against my retailer holdings. I think that I'll be OK with large positions in SYM and ANF against a large KSS short. But even without the long-short, I am still finding retailers that look EXTREMELY attractive. It has become my one of my favorite hunting grounds. I think I might have just found another one with a "duh" valuation. Reminds me of when Bill Gross of Pimco recently said he wouldn't buy corporate bonds at any price. That's what you hear at a bottom. This guy is the biggest bond manager in the country - nobody's questioning his intelligence, but a contrarian's got to at least think about buying when the biggest guy in the business says he's already sold. And high yield corporates are yielding 14%. I don't buy bonds, but I play this through what I judge to be a diversified basket of lay-up LBOs if the high yield market shows any sign of life. I won't name them, so please don't ask.