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

To: MCsweet who wrote (11847)	1/13/2001 10:38:47 PM
From: rjm2	Read Replies (1) \| Respond to of 78639

Hey, I was also a buyer of MOVI and with all the talk about cash flow lately, I kept thinking of MOVI. Its hard to ignore it based on cash flow. The question now is what is a fair valuation for MOVI given the industry ? I almost wish they could write off all that amortization.

To: MCsweet who wrote (11847)	1/16/2001 1:34:59 PM
From: jeffbas	Respond to of 78639

I am a big fan of VOD and with respect to MOVI suggest the comments of last year are still appropriate. A video store in my suburban (not rural) town just closed. Earnings will disappear long before rental of movies at such places will stop, because of fixed cost issues. I do think it is OK to look at something like this if you look at it like a depleting asset, like an oil well. The P/E has to provide both a return of capital and a return on capital. The problem is that you are not getting the cash as with an oil well and you are relying on mgmt to successfully put that money to work in a different business where they may have no special expertise. To a certain extent EK mentioned in my preceding post is an example of mgmt failing to use film cash flow successfully to diversify.