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

To: Bob Rudd who wrote (13803)	1/28/2002 1:15:44 PM
From: Keith J	Read Replies (1) \| Respond to of 79085

Yeah, but will the kids be able to live without their AOL IMs and chatting? That to me is the question. Plus, it appears that broadband penetration is going to be slower than previously thought, absent any major government initiatives (and most likely rural areas will not have any broadband option except satellite). So while subscriber growth may slow, as long as AOL retains membership, they should be in pretty good shape. Just an off the cuff calculation: 33 million AOL members (assume worth $2,000 per member) 12.7 million AOL-TW cable subscribers (assume worth $4,000 per subscriber) Networks (assume worth $20 billion) Film (assume worth $10 billion) Other (assume worth $5 billion) Total = $152 billion Or roughly $30 per share, after subtracting out $20 billion in LT debt. Not a screaming bargain, but not ridiculously overvalued at this level either. Writing covered calls may be the best way to play this. Hard to tell how market will react to earnings release this week. Will success of Harry Potter offset potential goodwill writeoff? That's my 2 cents. KJ

To: Bob Rudd who wrote (13803)	1/28/2002 2:55:36 PM
From: American Spirit	Respond to of 79085

AOL - not exactly a value stock but the Street's not giving the world's dominant media company any slack or premium value right now. Might be the right time to jump in though as earnings ought to surprise to the upside and the media assets are solid and substantial. Certainly the value of the pieces is much more than the current share price. This wave of worry about accounting practices has been overdone IMHO at least in terms of AOL. When you subtract 60 billion in good will the market cap is quite reasonable. I think they'll get away with their price hike which will improve profits (globally as they expand) and Warners and HBO are booming. At this price I like it for a $4 pop short-term (market conditions permitting). Longer term I like it even more. Reasonable chance to return to the 40's this year as ad revenues recover, assuming tehy do as predicted by summer. Another value I like is PALM. Though their financial situation ain't great their brand name and recent re-structuring make its 2+ billion market cap look pretty small. As frosting on the cake I like the odds of takeover bids. PALM would be a great strategic takeover for one of the majors. Their new 705 looks to kick some ass. I know one company that just bought their whole system and they love it. Other values I like are HAL (asbestos fears overdone and still very cheap with a great dividend) and SCRM (top rec of a broker friend of mine who has researched deeply and says "just wait") For what it's worth. Of course the market can and will do almost anything. But better to buy near the bottom into uncertainty IMHO than catch it after it's popped. The pops don't seem to last very long these days.