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

To: Grommit who wrote (11457)	11/20/2000 1:09:57 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78602

Another tough day for investors. I'm making the following adds today: Buying more Dana, TRW, and Adaptec. I'm also buying Valassis. The positives with this company for value investors might be: company's main business - those much beloved (-g-) Sunday newspaper advertising inserts - "may" be recession proof, the company apparently (from what I read) has "substantial" (my quotes) free cash flow (Stock outstanding and debt are coming down.), earnings have increased every year for at least past 6 years, there's a pe of about 11. Negatives to be considered include sales growth rate, a still high (imo)price/sales, and negative book value (something about when the company ipo'd in '92 they had to offer up stock and debt to their owner). Also, the stock today is in the 28 range - while that's down from highs, it is up from lows seen in October, so coming into the stock now is joining the party a little late maybe. Also today I'm starting to buy URS Corporation which is a rapidly growing construction engineering firm. Some of the value measures for it are the mirror image of those for Valassis. URS growth - earnings increases every year for past 6 - are accompanied by growth in number of shares outstanding and a very large increase in debt. After an acquisition, ltd/eq = 1.8 -- that'll be a reason for its dismissal by a lot of people here -g-. It looks like URS has positive free cash flow though, and the p/sales is low (imo) at .1 with a pe under 6. The company is broad in its geographic reach and the types of business it undertakes. (They have about 15,700 employees, according to Yahoo.) They reported an increase in backlog in their latest (9/00) report. URS might pop up for those who are screening for a play on infrastructure ugrades -roads/bridges/airports - that might occur here (in the USA). I've not checked URS accounting methods, but if they have fixed pricing and use percentage of completion or a variant, then there may be a risk that they could restate current and past earnings when key jobs going many years are finally completed and all actual expenses are then recognized. (For now, I'll assume that that is a small possibility affecting the stock, given the diversity of contracts and already low price (imo) of URS.) Taking some profits today in Merck. finance.yahoo.com all fwiw, Paul Senior