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

To: Jurgis Bekepuris who wrote (15191)	8/14/2002 5:17:12 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78570

Or sell itself, distribute the proceeds, and let the investors become their own asset allocators with those proceeds. Very seldom does one see companies selling themselves because of low ROE. Low ROE companies are a fact. They may be buyable though, depending on price (and risk tolerance). For example, if American Airlines parent AMR could earn 5% on it's $28 book value (in better times it's earned more), that'd be $1.40/sh. Which would give the stock a 6.2x eps on the current stock price ($8.68). Or for investors' ROE, that could be considered 1.40/8.58 = 16.1%. (aside: AMR is trying to reduce its size, so maybe one might be lucky enough to eventually see even a mediocre 10% return on a reduced book value, say a $20 or even a $14 bv.)