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Strategies & Market Trends : Dave Gore's Trades That Make Sense -- Ignore unavailable to you. Want to Upgrade?

To: im a survivor who wrote (15879)	2/27/2003 11:42:58 AM
From: Bob V	Read Replies (1) \| Respond to of 16631

KG4 I used to buy on fundamentals and value but I got burned too many times. I took a quick look at DUK and would have some concerns. I got my info from Yahoo and it is dated. Firstly a quick look at the chart shows that DUK has been making 52 week lows off and on all year. A stock has to make new lows to go lower. Its has been diving on good volume. The big boys (Institutions) are net sellers. From Yahoo : For the fiscal year ended 12/31/02, revenues fell 18% to $15.19 billion. Net income applicable to Common before acctg. changes fell 48% to $1.02 billion. Results reflect lower sales from gas and petroleum products and higher interest expense. If interest rates are a problem now what will the effect be when the economy turns and the Fed raises rates? On that note I checked the Balance sheet. Again on Yahoo and it’s from June 2002 but I have a couple of concerns. Although DUK has what seems like plenty of cash it has a mountain of debt.(again the interest rate concern) It also has almost 5 billion in goodwill shown on the asset side of the sheet. To me goodwill is how much you overpaid for an asset. The other concern is a news item from Feb 18 : Federal Grand Jury Subpoenaes Duke Energy Unit. Implies management dishonesty, which seems to be the kiss of death on Wall Street these days. If you buy at $13 and the stock hits $5 to $7 and you buy triple the amount at say $6 that means that the stock has to go up 29% for you to break even. Value investors like Buffett and Lynch don’t recommend averaging down. They claim its like trying to catch a falling knife. Its better to let it hit the floor and stop moving before you pick it up. Just my thoughts. Remember I’m usually wrong.