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Strategies & Market Trends : Z PORTFOLIO -- Ignore unavailable to you. Want to Upgrade?

To: Ron McKinnon who wrote (7589)	6/15/2002 3:09:15 PM
From: Paul Moerman	Read Replies (2) \| Respond to of 11568

Ron, thanks for a class-act response (I mean that in a positive way). I still hold KM, PMTR, TFS and GNSS in my real portfolio - way underwater, but I think all are oversold and the bad news has been fully priced in. Any spark of good news, or a general market rally/recovery could help any of these outperform the averages IMO. >>there will be times that I will rebutt with the facts as I see them << Here's how I see KMart as a speculation: despite bleeding money and forced to reinvent itself, it is a significant business: employing over 200,000 people in around 1,800 stores. The marketplace is valuing the whole business at less than $500 million, or .01 times sales! KM's CEO James Adamson had this to say on June 14th: "While there is still much hard work ahead, we are pleased with the early progress we are making in addressing in-stock levels, customer service and store traffic. Nearly all of our vendors have resumed shipments to us and in-stock levels in the stores have improved. Likewise, our focus on improving the physical condition of our stores and enhancing customer service helped produce a successful Customer Appreciation sale in early June." For some perspective, Target's market cap is $34 billion, selling at .85 times sales. It employs 280,000 people in around 1,400 stores. Is TGT profitable? Sure. Is 24 times earnings cheap? I'm not so sure, given its annual growth rate of about 15%. Then there's WalMart, market cap of $242 billion, selling at 1.08 times sales, or 35 times earnings, compared to an annual growth rate of about 14%. By the way, Phoenix can use all the rain you can spare!