Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: jhelmers who wrote (11454)	12/9/2000 10:56:26 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78601

jhelmers: With CCK @ approx. $3 now and kicked out of S&P, it may be a buy. Looks to me like it could be an either/or situation -- lose 70-95% vs. possible gain of double or quadruple. Hard to handicap the associated probabilities. Some insiders have recently bought a bit. I keep wavering. Paul Senior

To: jhelmers who wrote (11454)	12/10/2000 5:36:49 PM
From: Bob Rudd	Read Replies (2) \| Respond to of 78601

Asbestos/Post S&P Delisting: I picked up WR Grace, GRA, Friday when it was delisted from the S&P with asbestos concerns along with CCK. Now that the index selling is out of the way, I expect a significant bounce. I got good play on ACK with similar strategy - sold on the bounce. The key issue is bankruptcy from asbestos: This from the 9/30/2000 10-Q <<The net present value of such net liability (based on cash flow projections that span nearly 40 years - inherently imprecise but representing management's best current estimate) is approximately $270 million (discounted at 5.2% - estimated after-tax investment rate) at September 30, 2000.>> Investor relations, Friday, confirmed this meant that this was what they expected and that they did not expect to file [couched in the usual 'nobody knows future' CYA's]. IR also confirmed that their cash position was solid and they had no problems with credit lines. This is in stark contrast to what Armstrong was looking like prior to it's filing. Anyway, if we consider the 270mm npv asbestos as debt and run an 'asbestos adjusted' EV/EBITDA you get 1.6 [By comparison average EV/EBITDA of specialty chemical sector is about 6.6 and it's depressed like many industrial areas]. Worse case scenario, if it did declare bankruptcy, the market seems to be rather kndly towards the both OWC ACK, since both are and have traded over a dollar - so downside appears to be somewhat limited based on current market behavior. Here's a comparison showing last 3 months trading activity. quote.yahoo.com One other positive was that Mutual Beacon fund [Former Michael Price crew] owns a chunk of GRA - They're considered top notch in distressed securities and value investing - and they own it at rather higher levels.