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

To: Paul Senior who wrote (2471)	11/15/1997 7:36:00 PM
From: jeffbas	Respond to of 78627

<< dissuade Mr. Buffett >> Yes indeed! He has said that you can add a good mgmt to a lousy business and the reputation of the business will not change. (I would guess that he might also not be enamored of the steel industry.)

To: Paul Senior who wrote (2471)	11/15/1997 9:37:00 PM
From: csm	Respond to of 78627

Paul, I prefer BLDG to its competitors because it has a better margin and appears to be more focused on increasing its market share. I call it a Buffett stock because 1. It was identified in a "Buffett" screeen that someone ran that seemed to be carefully thought out and happened to identify Dairy Queen among 15 other stocks. Since Buffett bought Dairy Queen it would seem that the fellow who built the screen did a credible job. 2. Steel buildings seems like such an old, boring business that it just sounds like something that only a true value investor could love. 3. Management at BLDG includes founding members of the industry. They sold the company several years ago, watched it flounder and then bought it back. Also, the Chairman (I'll check if you wish, I'm just going by memory here) has considerable skill in acquisitions. BLDG is continuously acquiring small businesses that increase BLDG's capacity. I don't usually like companies that grow through acquisitions but these guys do it without increasing debt or diluting stock, they generally use cash. I haven't bought any yet because I'd have to sell something else and I don't think I have to chase BLDG right now. Anyway, that's what I've been able to find out in the past few weeks. And while we admire Berkshire's 28% return over time, BLDG's has been 40% over the past 6 years. I find that impressive for such a "low tech" business. I'm not sure if a mediocre or cyclical business would dissuade Mr. Buffett, but I know that Peter Lynch likes to recommend well managed companies in boring businesses in industries that are not growing quickly. BTW, I caught Peter Lynch here in Toronto a few weeks ago (thanks to Scott Mc) and he was quite entertaining but didn't say anything that isn't written in One Up on Wall Street. Others may have quite different takes on BLDG. There is a thread on SI. I'd like to hear other sides while I'm just window shopping. Stuart.