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Strategies & Market Trends : Disciplined Investing, especially the NAIC way -- Ignore unavailable to you. Want to Upgrade?

To: The Philosopher who wrote (131)	3/6/2001 6:27:36 AM
From: paul gambuto	Read Replies (1) \| Respond to of 469

thanks. seeing them on the wellfargo site make me feel better about them. they are a registered broker/dealer, so they have insurance, should they go out of business. i'm not doing much. gonna start with $50 a month. it looks like a nice place to get started building a little at a time.$2 fee for every monthly contribution. i'm gonna give them a shot. thanks for your help. paulie

To: The Philosopher who wrote (131)	4/12/2001 6:22:22 PM
From: The Philosopher	Read Replies (1) \| Respond to of 469

Our club bought Men's Wearhouse today. Managed to catch it at the day's low, so we've already made money on it! <g> We liked the business model. Sales and earnings have been increasing steadily, but the stock price has been about level for four years. In our opinion, this was basically the PE ratio dropping to a reasonable level -- it had been in the 40s, which is silly for a retailer. But now it's dropped to about 10, and we don't see it going much lower than that for long. We projected earnings growth at 15% (down from First Call's long term earnings projection of 20.2 and the historical earnings growth of 29.2 according to Toolkit), we dropped the average high PE from 29 down to 25, which is in line with historical patterns and should return if the growth continues, and used a low of 15.4, the projection based on the average low PE of 13.8. Using 25-50-25 zoning, this gave a buy range up to 36.7 and an upside-downside of 14.4. Even dropping the earnings growth down to 10%, and the PE down to 15 leaves it in the buy zone with an U/d of 6.4. So unless the stock stumbles, there's not a lot of risk there. They have some nice aspects to their business model. Unlike womens clothes, their styles don't turn over rapidly, so if their stuff doesn't sell one season they just store it for the next season; they don't need to let it go at fire sales. They don't stock the trendy designers -- Armani, for example -- but concentrate on high quality clothing at 20% less than the department stores. They are very service oriented -- for example, if you're on the road walk into any MW store and they'll give you an instant press to your jacket. Read their 10-K for an amazingly frank discussion of their business model. It's fun reading! Excellent PERT. They have plenty of room for expansion; they have, for example, 84 stores in California, which may be getting toward saturation, but they have lots of room to grow in other states, and have recently picked up the Moore's chain in Canada. A stock worth looking at. Seems a pretty classic SSG stock. Of course, do your own DD! Another little company I am looking into is WWVY. Not a classic NAIC stock, but a possible play for a takeover. Finally, am checking out Lincare Holdings, LNCR. Not in the buy range at present, but might wind up being on a watch list in case it retreats at some point. Profit margins have been dropping somewhat, but are still in the 28% range. On conservative projections (PE 22, growth 12%) they are in the middle of the hold range. I could probably put them in the buy range by some aggressive assumptions (for example, their EPS growth has been around 40%), but that's not our style. Still, I may decide I was a bit too conservative on my first look. Anybody know this stock?