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

To: Paul Senior who wrote (19212)	5/17/2004 8:54:16 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 78673

Paul: Looked at RSC. The multilples are very attractive - especially at P/FCF. Nevertheless they are an electronics/appliance retailer - a small one competing against biggies, hoping focus on small communities will protect them. It's not...just slowing the decline. Revenues declined 5% annually over the last 2 years while industry leader BBY rose 10+% over same period. WMT, BBY & online competitors are nibbling away at these guys market share. Insider selling at what appears to be attractive valuation confirms that this is a business in decline. Sure the cashflow looks good - it often does in early stages of decline, but it too will follow earnings and revenues down the drain...insiders recognize this and are bailing. Technically, a 5+ year trendline appears on the edge of being broken.

To: Paul Senior who wrote (19212)	5/19/2004 11:00:03 AM
From: Bob Rudd	Read Replies (1) \| Respond to of 78673

Paul: I've been looking hard at OCA last few days: REDFLAGS: high short interest; change auditor over weak internal controls; CFO resigns, replaced by longterm team player; litigation with customers POSITIVES: insiders buying bigtime; Value multiples WEIRD: Headsnapping whipsaw with big upside close when loss announced on accounting change?? I tracked down 2002 short [@$26] write-up at value investors club: valueinvestorsclub.com In it, the writer breaks down a per practice valuation, marveling at how much higher the practices are valued as part of a public company - updating it with current data, it appears the practices are still rather highly valued compared to acquisition costs...though not nearly so much as shown in the write-up given the 70% decline in market value. Another interesting aspect was the comparison to Physician Practice Management co's - a hot commodity in the mid-late 90's with similar business models to OCA: All formerly publicly traded PPM's have either gone bankrupt or 'evolved' into co's with very different business models. Here's a list: aafp.org Every one I did a search on came up bankrupt and/or acquired and changed. Could the insiders be deluding themselves...or am I missing something?