To: 249443 who wrote (15400 ) 9/8/2002 9:44:51 AM From: Robert Hoefer Read Replies (1) | Respond to I did read the WSJ article, and don't think there is anything new or shocking about their assertions. Fleming is in a highly competitive business, and the arcane deduction system seems to be an industry standard. When your net profit margin is less than one percent, you have to play a tough game. It's true the company lost some customers, but it gained others, and sometimes resumed business with the formerly estranged customers or suppliers. Sales have increased over previous years every Q since 2Q 2001. Fleming recently released letters from Solo and Unilever stating that the article did not represent those companies current satisfactory relationship with Fleming. Keep in mind they supply 12,000 outlets. How could they not lose some customers every quarter? When you have 18 billion in annual sales, losing 100M of business is not much, especially when you replace more than you lose. As for suppliers, anyone remember the conflict between Rubbermaid and Wal-Mart? There was some very tough talk as I recall as WMT pressured for lower prices and Rubbermaid made counterthreats. It's interesting that WSJ had to dip into the past and mine old news to come up with a sufficiently negative article. Perhaps someone told the reporter that FLM's stock was down, so find some reasons why. Some shorts have indeed made money, and I don't begrudge them. Same thing in Allied Capital (ALD) stock. Good company getting a trashing by the shorts. I think it only works well in a bear market, where fear and uncertainty help the cause, and only in the short run. When general confidence returns the longs will profit. 6x 2003 cash flow = $40.
