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To: ild who wrote (166527)	5/17/2002 4:06:51 PM
From: reaper	Respond to of 436258

<<what happened to PLCE? >> They made the quarter and maintained "guidance", but folks don't believe the guidance. They've gotten a little bit off on their merchandising; they are taking steps to fix it but the analyst community feels that it won't get fixed quite as fast as management thinks. These guys miss numbers fairly chronically (about once every 4-6 quarters) because the business is inherently not as predictable as say Family Dollar. but the GOOD thing about PLCE (and why I like it) is that this quarter-to-quarter earnings volatility is off-set by very high inherent financial returns that allows the management to grow the square footage of the business by 20% a year on a self-funded basis despite the occasional miss. So if you take a LONG-term view, you can be pretty certain that over 4 years the store base will double, which unless management TOTALLY screws up profitability or unless you pay WAY too high a price for earnings, means the stock will be substantially higher in 4 years. I have been out of the stock for a while; its worth consideration here but I'm not inclined to disturb my collection of long and short retailers/restaurants right now. I don't like to initiate a retail position until a stock gets to <10x trailing 12 months cash generation, and I know that most when times are bad and the investment community doesn't like them will go below 8x. PLCE is at 10.3x right now; 8x would be be about $23. Cheers