Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: blankmind who wrote (13521)	1/1/2002 4:46:26 PM
From: rjm2	Read Replies (1) \| Respond to of 78553

SOFN-500 EMPLOYEES and they have BEEN trying to sell it without luck. What makes you so sure its impending sale will result in a profit for shareholders ? They ARE burning cash right ? And recently they have started looking at options that would not take advantage of their $200mm in NOLs right ? This kind of smacks of desparation, no ? (Just playing devils advocate)

To: blankmind who wrote (13521)	1/1/2002 9:06:15 PM
From: Don Earl	Read Replies (1) \| Respond to of 78553

<<<NTAI; REI, PPL, ESREF, WILCF, HCAR.OB, INV, ISTN, WEC, & I love SOFN due to its impending sale>>> PMFJI, but after taking a quick look at your list, I kind of wonder about the value. One thing I noticed on nearly all of them is the very high debt to equity ratio. While I have a personal liking for buying below book, I tend to avoid companies where book value is leveraged to the teeth. IMO, the whole idea of buying below book is to purchase equity at a discount. If that equity is highly leveraged, book value belongs to creditors, not shareholders. To a certain extent I'll go along with the idea of leveraging assets to fuel growth, but GAAP allows so much room for abuse in capitalizing expenses, that highly leveraged assets is often a prime indication the company is unable to generate enough free flow cash from operations to run the business. As I see it, the main trap for investors screening for value is, "If it looks too good to be true, it's usually too good to be true." I'd be interested in seeing some discussion from those who use some form of fundamental analysis in screening for value, on debt to equity ratios. I generally screen out anything above .5 to 1, and tend to favor those at .2 to 1 or better. If nothing else, it does eliminate the Enrons. Comments?