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

To: Bob Rudd who wrote (13148)	10/1/2001 2:02:30 PM
From: Brendan W	Read Replies (2) \| Respond to of 79000

The Limited. Bought The Limited (LTD). The LTD story is somewhat involved and I will describe it in shorthand. PM me any questions about the shorthand. In order to follow the story you need to know what LTD owns. In other words, this post needs to be read in conjunction with an understanding of LTD. Also, my assumptions are intended to be conservative. If errors are found, please advise. FYI, LTD yields 3% on a 30 cent dividend. LTD’s debt is rated baa2 by Moodys. My investment rationale (contrary to the Motley Fool post here: fool.com is that when buying LTD one is buying Intimate Brands (IBI) at a 33% discount, not buying Express/The Limited/Lerner/Structure. IBI is Victoria’s Secret and Bath & Bodyworks and is valued by the market as LTD’s mainstay. The 33% discount puts approximately a 9 PE on LTD’s IBI stake. IBI has not had a good year and the events of 9/11 are not going to make it better. IBI has a PE of approximately 13 on 1/2002 earnings but the earnings must be suspect. My accounting for the 33% discount is as follows: LTD market cap 4072 less: surplus cash -300 less: value of non-IBI revs -1000 less: publicly traded stock -323 Cost of LTD's IBI stake 2448 Market price of LTD'S IBI stake 3638 % discount 33% The market cap’s I calculated as follows: Shares/ price/value ltd 428.6 9.50 4072 ltd's ibi shares 404.235 9.00 3638 ads 14.7 16.25 239 chrs 8.7 4.91 43 glyn 3.9 10.67 42 total publicly traded stock 323 The surplus cash was calculated as follows: Current Assets 1900 Current Liabilities -1000 Long Term Debt -250 Long Term Liabilities -223

To: Bob Rudd who wrote (13148)	10/1/2001 11:28:05 PM
From: Grommit	Read Replies (1) \| Respond to of 79000

JBX. Well, they cited economic uncertainty AND sept 11. The key is that they said... "For all of 2001, the company said it expects earnings of $2.10 per share, down from previous guidance of $2.16. The company said it expects a 5 percent earnings growth rate in 2002, and earnings of $2.18 a share." So the're probably worth $20-$30 per share. I sold a few shares Aug 28, but kept a good amount also. My strategy, for anyone who cares -- I have ambled to safety since Sept 11. Selling every day until this week. I bought more Reits and Cash, and sold technology. I had a nice start because since August 1, I have been moving to dividend paying stocks. I think I mentioned it here. I think they were hammered less than others, but maybe not. My best recent buy has been HPT at the bottom. They are a REIT in hotel industry. They lease out the properties to Marriot and such. They have a clause in the contract where they get added rent based on hotel revenue, but it was a very small added bonus in past years. If it goes to zero, not a problem, in my view. The hotels have 10+ year contracts or so. They have 1 year security deposits. The stock is paying 12%. I recommend them, but what do I know? Another fresh purchase is REG. Commercial REIT, focused on neighborhood shopping centers anchored with grocery stores. Sounds solid to me. Remember -- food is cool. The 4 largest tennants (Kroger, Safeway, Publix, Albertsons) have around 30% of the lease area and average least term is 15 years. 8% yield now. (8.4% when I bought them.) Also bought more apartment REITS -- I like MAA, PPS, AML, AIV, SMT, GBP. Bought more ALD -- check their website and browse through their investments -- wow!. Another grocery REIT is NXL, which I own -- 9.6% yield, but I do not like their management or EPS as much. I also bought SWY as others posted. I had 'em before and posted here. I quadrupled my stake on their announcement of earnings. I still like CAG and SVU, but have enough. Food is cool. Also bought more BOBE, and a fresh position in IHP. I like IHP's business model and history. The build the franchises and then sell them to franchisees when up and running. My bad sales have been - S (I sold 2/3, and I did not want to, nice dividend, damn, why did I do it?), APPC and ROST. My best bail out was DTG at 16.77. And CGO. Looking at KWR, but even after reading their annual report, I cannot figure out what they do. Any thoughts? REITS, Cash and Fixed income moved from 36% of my investment portfolio, to 56% now. I sleep better. alliedcapital.com Excuse the long post. I haven't posted in awhile. grommit.