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

To: Dan Meleney who wrote (40295)	11/27/2010 11:07:48 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78486

re SVU - I think the problem with SVU is the high debt load in conjunction with a shrinking business. If the business continues to shrink the value of the equity slice (~ 1.86B$ at this point) will continue to shrink at a rapid clip. You can see how this ends with various radio, TV station stocks or Newspapers. These all are shrinking business that have a debt load that they cannot support any more in many cases. Based on the recent evidence and the apparent market share losses, I think that is a real risk with SVU.

To: Dan Meleney who wrote (40295)	12/2/2010 4:03:23 PM
From: Dan Meleney	Read Replies (2) \| Respond to of 78486

SVU...I just entered with a full normal position at 8.68 I'm not crazy about the intangibles, but I think their cashflow will support a significantly higher price.

To: Dan Meleney who wrote (40295)	12/2/2010 5:20:57 PM
From: rllee	Respond to of 78486

SUV - I am tempted but I would still like to see the year end tax loss selling subside before entering.

To: Dan Meleney who wrote (40295)	12/3/2010 1:54:20 AM
From: Spekulatius	Respond to of 78486

The big issues are a) uncompetitive prices in their Albertson store line, leading to market share losses b) WMT and TGT (the latter has entered the grocery business with store add ons) c)fairly high debt load (highest amongst competitors SWY, KR) Valuation looks undemanding though and the equity start to look like a call option.I have not bought yet but I think I will going to take a equity position too. My biggest concern is that the market share losses become a runaway train. The high pricing strategy with promotions to drive traffic does not work well any more apparently (well at least not for us - we barely frequent the Albertson stores). I personally find the bulk of their offerings grossly overpriced, plain and simple, it makes it harder for me to believe that investing in this has merit, although from a pure number point of view it does.