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

To: Paul Senior who wrote (15659)	10/17/2002 7:16:21 PM
From: 249443	Respond to of 78523

Paul -- re: Al Frank: I don't know if you followed Al Frank (you did mention his passing a while back), but today I was doing a little cleaning and came across his book "Al Frank's New Prudent Speculator". I enjoyed the book and always enjoyed reading his analysis. Praise by Kenneth L. Fisher on book's back cover: "Al Frank is one of the few truly fundamental thinkers on the financial scene. Although often irreverent, his analysis of individual stocks is first rate and his ideas are always worth any time you give them. I'd recommend this book to anyone."

To: Paul Senior who wrote (15659)	10/17/2002 7:45:51 PM
From: Bob Rudd	Respond to of 78523

Paul: I looked at IPG, but the combination of totally blindsiding analysts, lack of confidence in management and the numbers, insider selling, liquidity/credit ratings concerns, and enterprise multiples that even before the EPS cuts weren't in bargain territory keeps me on the sidelines. From Lehman report: DOWNGRADING TO 3-UNDERWEIGHT BASED ON 1) continuous EPS misses and LIMITED CONFIDENCE IN ESTS; 2) further potential BUSINESS DISRUPTIONS; 3) probable credit rating downgrades; and 4) meaningful share price downside on new ests. Lehman also questioned cash flow & cash flow trends. Merrill: "Interpublic's pre-announcement last night went beyond our imagination." There were several comments to the effect of 'We don't think they face a liquidity crisis' or 'We think they can survive' that imply there's some serious ugliness on the the credit front...and we all know how that can play out. If one takes PE on today's revised est's, you get 13.4 on 02 and ~11 on 03...looks attractive...but there's little confidence in those estimates or the management providing them. Running enterprise multiples that take into account the 2.44 Billion net debt and you get 50x EBITDA, Negative EV/(EBITDA-CAPEX) & EV/FCF ~25...combine that with cash flow trend concerns and liquidity issues...looks like another 'value trap' to me & I've already jumped into too many of those snake pits this year.