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

To: hoyasaxa who wrote (33019)	12/12/2008 11:34:37 AM
From: Paul Senior	Read Replies (2) \| Respond to of 78748

I don't know how to relate A/R and DSO figures to stock price. We're in a recession, nobody buying nuthin, people saving not spending -- so I have to believe inventories of all non-JIT companies are ballooning, lots of customers are late pays, DSO figures are high. No surprise stock prices of distributor companies are down substantially. How can I tell if the stocks are down enough to reflect the bad A/R, DSO figures? Or that there's worse to come? Seeing A/R, DSO figures now, doesn't tell me that stocks might or might not be buys at current prices. (That's just me though. Maybe others can use these metrics in a better way.) I haven't heard much about DSO for a while. Reminds me of the Motley Fool writers who back in the late '90's early '00's used to like to use the DSO metric: A company would announce surprisingly bad earnings, the stock would drop sharply and make headlines. Next the MF authors would come in and write an article saying, well really, the troubles and stock drop shouldn't have been a surprise to anybody because look, you can see that DSO were rising quarter over quarter and so it was apparent that things were not going well, and you as an investor could've avoided this problem company if you only tracked DSO. Well for me, that wouldn't be easily accomplished because I have so many stocks, and DSO requires some calculations. More significantly imo, was that the MF articles always came out after the fact of the stock fall. Never any article with a prediction of a stock drop based on an analysis by the author of DSO. Anyway, maybe DSO is helpful/useful to others. I'd like to see it's predictive successes - not ex-post facto reports. Right now, since all stocks are down, as I say, for me, I don't know how DSO use might help or influence my buy decisions.