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

To: Paul Senior who wrote (27889)	8/23/2007 6:32:49 PM
From: Jurgis Bekepuris	Respond to of 78760

Yeah, it's tough for value (or GARP :)) guys to jump on these growth machines. They are expensive. And by the time they are not, they may be in trouble. And then we have to evaluate if the trouble is temporary or not. ;) Like Chandler said "Trouble's my business" :P P.S. Yes they are all too expensive for me

To: Paul Senior who wrote (27889)	8/24/2007 12:15:06 AM
From: Mark Marcellus	Respond to of 78760

Paul, I agree that URBN is a bit pricey right now from a value perspective, but it has been in the 14's within the past year. That counts as a value using my metrics. But I wouldn't recommend changing strategies just because you missed a few, and I certainly don't recommend "faith-based" investing. However... In my experience, if you identify and keep an eye on well managed, fast growing retailers with no debt and the ability to fund growth from cash flow, you will often be able to snap them up at a decent price. My own research staff started talking this one up when it was in the high 20's in late '05. I watched and waited, and eventually got a starter position in the high teens and then was able to load up in the mid teens. Given their fairly credible claim that they will be doing above 20% growth and above 20% margins for the next few years, I consider that a good price. Where we may differ is that I don't look have any absolute limits for P/E, P/S, P/B or other measures when defining value. For a company like this, or any company you understand well enough, if you can explain with confidence how it is going to grow quickly enough to justify the current price, I think that, say, a P/E in the low 20's can definitely be considered a value.