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Strategies & Market Trends : January Effect 2001 -- Ignore unavailable to you. Want to Upgrade?

To: Bob Rudd who wrote (66)	12/19/2000 10:53:50 PM
From: Q.	Read Replies (1) \| Respond to of 289

re. TERN, I also took a quick look, and like you I was left unsure of what I thought. The cash value per share is $8.9, and the stock is selling for about 4.75. That's really unusual for a stock with a market cap as big as this. When a stock sells below cash value, you usually expect to see some substantial cash burn. When I saw the 9-month loss from operations was $94 million, I thought my gosh, this is one terrible basket case. But somehow the cash flow from operations is only a negative $5 million over the same period. That's probably the biggest discrepancy I've seen between earnings and cash flow, and to figure it out it doesn't help that they have omitted the customary adjustments to net earnings that would normally be listed in the cash flow. It seems that they have done a lot of acquisitions, and this has produced a lot of goodwill to depreciate. That seems to be a big part of the discrepancy. But just the same, any company that has grown so rapidly by acquiring lots of other companies is simply too hard for me to figure out. I'd rather find something easier to understand.

To: Bob Rudd who wrote (66)	12/20/2000 12:17:25 AM
From: Q.	Read Replies (2) \| Respond to of 289

GPI popped up in another screen, after I eliminated tech stocks. They operate a bunch of car dealers, with sales of over $3 billion annually. The stock has declined quite a lot: finance.yahoo.com They recently announced that they expect to meet estimates for 2000 but not for 2001 due to declining new auto sales. p/e is about 4.6. They are leveraged with debt/equity of 2:1, and profit margins are razor-thin. I didn't know that car dealers had such low margins. Institutions own 47% of the float.