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

To: Paul Senior who wrote (13275)	11/2/2001 2:09:49 PM
From: Brendan W	Respond to of 78520

Back into Enron at $11.04. Can management screw this up any better? Still no help on the transparency. Now Enron is definitely junk... some of their bonds' yield-to-maturity exceed 20 percent. The credit rating agencies are trying to "help" Enron by deferring removing their investment grade. Yet their bankers are now insisting on collateral for the new banking facility. The smell is bad. Sold Medallion Financial at $8.03 for a 17% loss. I held it in a taxable account. I am guessing the quality of their New York taxi medallion collateral has been compromised. Yet no peep out of the company since August. Combine this with management issuing equity at $11 which did not please me (which in retrospect now looks prudent)... I am standing back. Sold Officemax (OMX) and Office Depot (ODP) with gains of 45% and 104% respectively. These now look expensive relative their replacement... a purchase of Linens and Things (LIN) in the low $18s. LIN has no debt and presents itself as a 15 to 20 percent earnings grower. The trailing eps is $1.36, next year eps is estimated at $1.52. LIN does not compete very well with BBBY, but it is a whole lot cheaper than BBBY. Sold Merrill Lynch (MER) for a 22% loss. Proceeds went into Morgan Stanley (MWD). MWD is not cheap but its earnings are holding up better. Sold Conagra Foods (CAG) for a 21% gain (including dividends). This was discussed over the summer on this thread. The historical earnings growth on CAG is anemic and I am reinesting the (non-taxable) proceeds into Safeway (SWY) and Kroger (KR). These grocers are cheap only if you accept their earnings growth projections of 15%... which I do. Sold Mellon Financial (MEL) for a 4% loss. Mellon's earnings projection has been gutted. Proceeds went into State Street (STT) and Bank of New York (BK). STT is comparable on a current year PE basis and it's earnings growth expectations are both higher and more certain. BK is substantially cheaper on a current year PE basis. Sold Manpower (MAN) for a tiny profit. It's 2002 earnings projection have been cut to 1994-5 levels. Proceeds went into ZQK and PCL.