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

To: hoyasaxa who wrote (15707)	10/31/2002 2:15:17 PM
From: Paul Senior	Respond to of 78625

hoyasaxa: JCI looks okay. I usually carry an on-going debate with myself about what are the best stocks to buy in a downtrodden sector. The most downtrodden, the largest and strongest, the most leveraged? In the auto supplier business, JCI is a dominant player in its niche, as well as in size and financial strength. And a decent grower too: book value up every year plus a small dividend for patient investors. For me though, I choose one of the more leveraged companies: DRRA. DRRA has a lot of debt and is a much smaller player than JCI. To me, in terms of possible p/e expansion and increased p/sales and therefore stock price, DRRA seems to have much greater potential than JCI. My idea here is that these auto parts suppliers are being whittled down to a smaller number of players. Those few remaining are competitors, but they're in it together. I view the auto cycle as part of a larger economic cycle. So where companies are not tied primarily to just one of the auto manufacturers, it's hard for me to see how one auto supplier could be making money while another would be losing. Right now, that is so: they are all benefiting: biz.yahoo.com OTOH, I tried this same tactic with Federal Mogul, but I was wrong, and it's debt level eventually overcame them. Bankrupt. If DRRA has better potential than JCI, it certainly has more risk too. finance.yahoo.com Paul Senior

To: hoyasaxa who wrote (15707)	10/31/2002 5:59:34 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78625

hoyasaxa, I know nothing about LabCorp, but I do like Quintiles. For those who don't follow it, the chairman/ founder recently offered to take it private for $11.25/sh. (Stock closed today @$10.75.) I'm under the impression that analysts who follow the co. say the price is too low and won't be accepted by the committee set up to evaluate the offer. QTRN has no long term debt and $5/sh cash (per Yahoo). I like QTRN because, being as large as it is, it's involved in several ancillary businesses in the biotech and pharmaceutical industries, e.g. data collection, marketing, and trials (testing). QTRN should (that's imo) benefit from the alleged increasing trend of pharmaceutical companies to outsource. OTOH, they don't seem to be benefiting very much so far. Also, some people believe as consolidation takes place in the pharma. and biotech sector, that will cut down on the number of business opportunities for QTRN and QTRN competitors. Thus a prime reason QTRN stock and competitor stocks are down. I am betting QTRN stock will move up further if/when stocks of pharmaceuticals and/or biotechs improve. Jmo, and I've been wrong many, many times. finance.yahoo.com