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

To: Paul Senior who wrote (18428)	6/9/2004 1:38:26 PM
From: Bob Rudd	Read Replies (3) \| Respond to of 78519

Started STV @ 3.10 based on low multiples EV/EBITDA 2.1 EV/FCF 3.5 and good prospects for primary business - builds sewers and water mains and works on highway paving, bridge, and light rail projects, primarily Houston. Houston is growing and has considerable need to improve sewer system [City is flat and built on a swamp: Hurricane Allison flooded Houston 3 years ago; Some flooding in 2003 as well...usual pushback from conservative taxpayers, but infrastructure needs are there and flooding will continue until sewer system substantially upgraded] There's going to be 'lumpiness' to earnings due to ebbs and flows of construction activity and taxpayer reluctance. They also have an auto parts and non-food pet supplies distribution business that is barely profitable...but has provided $88 million Net Operating Loss to offset taxes for several years. They've carefully structured the business to preserve this tax 'asset'. Directors and managers own 42% so they're in the same boat as shareholders. On the downside, there's some related party transactions and option activity that you'd rather not see but doesn't hit deal killer level...this isn't the simplest company to figure out and I make no claim that I've completely got it nailed, but the multiples appear to provide significant margin of safety. quote.yahoo.com sterlingconstructionco.com

To: Paul Senior who wrote (18428)	9/15/2004 3:04:43 PM
From: Paul Senior	Respond to of 78519

I'll up my position in Steiner Leisure now. Very good profit margins, return on equity. Reasonable p/e & okay rev. growth. (All, imo.). Awful lot of persistent insider sales though . And company is controlled by an insider family. Spa business on cruise ships should do okay - cruise business has picked up. OTOH, several ships have decided to provide their own spa services and not outsource to Steiner. Some further observations in this positive Motley Fool article: biz.yahoo.com