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

To: Debt Free who wrote (41021)	1/11/2011 1:51:09 PM
From: Wallace Rivers	2 Recommendations Read Replies (1) \| Respond to of 78486

Don't own SVU, but you have to believe a dividend reduction/cut is very likely. One would also think that a shake up of mgmt. is likely. What a brutally competitive sector, plus you face the headwinds of the likes of WMT TGT and COST entering the space. So, how does mgmt. respond to losing market share...well, they say they will raise prices! If that's the case, I don't see them gaining market share, and the SSS comps. are likely to continue the negative trend line. Not a good recipe IMHO. I like some of the value metrics of SVU, but the debt load scares me.

To: Debt Free who wrote (41021)	1/11/2011 1:52:15 PM
From: rllee	Respond to of 78486

SVU - Is now under it's 5-yr low. No doubt WS is not optimistic about it maintaining the dividend. A dividend cut may even rally the stock IMO. It may now be a buyout candidate. My only concern is whether it will be a takeunder rather than a takeover. I own some few shares which is now under water.

To: Debt Free who wrote (41021)	1/12/2011 1:00:33 PM
From: geoffrey Wren	Read Replies (2) \| Respond to of 78486

Someone sure likes SVU on this board. As to negatives I see the economy and the competition. I believe SVU has unions and they will likely clean the carcass rather than make concessions that let the animal live. That is what the airline and car unions do/did, but unlike them I think no one would feel the need to keep SVU union jobs going by government subsidy. Even if they did, it would not benefit SVU shareholders. I did a cursory check on assets, and it seems they have a lot of value in Plant and Equipment. Anyone know how much of this is store ownership as opposed to leasehold improvements? Why this balance sheet entry is worth checking out is that the depreciation is an earnings deduction but not a cash flow deduction. Secondly the real property, if substantial, makes SVU a sort of REIT. Dillards (DDS), Sears, and Macy's own a lot of their buildings, and that forms a sort of backstop to value. Of course currently CRE is devalued, but it will come up again sooner or later. I remember about 10 years before Longs Drug Stores was purchased I saw a talking head talk about the value of their realty being as much as the stock was trading for. I never purchased, but kept watching and eventually Longs (which never did make that much money) was taken over at a good price that I think was influenced a lot by the value of the real property holdings. Anyone pencilled out the book value of RE holdings of SVU? And made adjustments? If the holdings are quite old, as some must be, the adjustment would be up I think.