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

To: Paul Senior who wrote (33609)	2/22/2009 12:26:11 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78918

Margins - well, I don't have a formula approach to margins. I am more or less a black/white guy. For most companies, I want high absolute net margins (at least 10% more or less), since this indicates IMO that the company or industry has a business allowing for sustainable good profit generation. Now, it is probably a good idea to try and understand why is that and are the margins really sustainable, but that's more qualitative consideration. I discard outright most of the companies that don't have high absolute net margins. But then there are category killers such as WMT, where low margins is not an issue, it's the strength of the company. So I consider some of these as possible investments as well. Now, I've listened to some presentations of Charlie Silk, who is a "fallen angel" small cap value investor. He emphasizes high gross margins (>50% or so). I guess his thinking is that if a company has high gross margins, it can always get profitable (again) by either growing sales and not increasing expenses or by trimming expenses. I don't really use his approach, but I wanted to throw it out into the discussion about margins.

To: Paul Senior who wrote (33609)	2/22/2009 12:31:45 PM
From: Spekulatius	Read Replies (2) \| Respond to of 78918

Paul, I would be interested in discussion you formula here. The only formula I used was a NPV formula using a LT growth rate 10 years out plus the NPV of dividends and discounting back with a discount rate. Right now I would say such an approach is pretty useless, since in many cases we do not know what the earnings next quarter, next year much less so in ten years are going to look like. Right now i like anializers approach more to look at stocks trading below book and that are still profitable. As far as ROIC and margin formulas are concerned I say use either one or the other.Using both amounts to double counting, IMO.

To: Paul Senior who wrote (33609)	2/22/2009 5:35:37 PM
From: richardred	Respond to of 78918

I consider the value of Global assets. Originally bought for around 2 Million. Airt should be able achieve a much higher stock price selling off this division they bought from Terex. The value of asset carried on the books trading well below what can be achieved in an asset sale or break up. A trait of many value investors like Mario Gabelli look for. The low number of shares outstanding should indirectly benefit shareholders, that's if a sale can be achieved. A sale might be hard in this market environment. Also If this board is true in achieving value for shareholders. IMO-The risk here is keeping the FED-X contract. A loss of this business would have a material impact. The Global backlog is down quite a bit. A Gov't order for more de-icers would be a plus to the stock. Some old news at face value below. A old seeeking alpha article on Intrinsic value Message 24296186 What the company is hoping to grow. Message 23950467 Neat story on the CEO allbusiness.com