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

To: rllee who wrote (38189)	6/5/2010 6:07:11 PM
From: E_K_S	Respond to of 78627

Hi rllee Here are the stocks mentioned in the article you posted: finance.yahoo.com I am not too sure if I agree with the author's conclusion that the lowest Price/Sales presents the greatest value to investors. Only SVU and WINN have booked a profit in the most recent quarters. The other companies continue to book losses even with their high sales per share. I would think that you would want to operate a profitable business especially if you generate very high sales per share. The high sales per share is "generally" reflective of the type of business (ie min-mart). These are primarily convenience stores that sell pop, cigarettes, candy, gasoline and other fast food products. Margins are much higher on these items and much more profitable. I am a bit shocked that with a large percentage of these high margin products that SUSS or PTRY can not even turn a profit. I was surprised to even see SVU on this list. Both SVU and GAP have a large amount of debt. It appears that SVU is managing their debt better than GAP. WINN has the least debt of the three grocery chains SVU, GAP & WINN in your Price/Sales screen. I would of thought that their 24 PE would be lower so it appears that the market has already priced in a premium for their low use of debt. The positive take away from your list is that SUSS & PTRY are small caps stocks (w/ few outstanding shares) and any positive incremental change in their business should result in a much greater positive earnings surprise. ================================================================== You might want to look at these lower PEs grocery/convenience retail companies. I believe they represent better value buys. finance.yahoo.com I like the defensive nature of the "pure" grocery chain. Everybody has to eat (or get their drugs even in a recession). This excludes restaurants and mini-mart categories. You can make an argument to also include the exclusive drug retailers too. I normally do not shop at Walmart except to pick up prescription medicine from time to time. However, I was at Walmart yesterday returning an item (HD had it at a better price) and noticed that 8 out of 10 people in the "returns" line was there to cash a check. The lady at the counter told me that they do a lot of check cashing and money order/bill paying services for customers. National Bank of Wal-Mart? moneycentral.msn.com Wal-Mart already offers money-transfer and check-cashing services. The next step is full-on banking. The financial services industry is terrified, but consumers might benefit. Walmart recently introduced the means to wire funds to Mexico using their store to store money transfer service. I suspect this is going to become a very profitable new business for the National Bank of Walmart. EKS