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

To: Paul Senior who wrote (45749)	12/1/2011 8:32:51 PM
From: E_K_S	Respond to of 78750

Hi Paul - Richardson Electronics Ltd. (RELL) Two insiders had sales in May and October which were pretty large. All the sales were a bit higher than the current price around $13.00/share. This one looks like a good value play especially if the electronic business picks up as I expect it too. They are still selling at the higher end of their range when you look at their three year price history. With $8.00/cash and no LT debt on the balance sheet it could be that their balance sheet is much stronger now than it was in 2009. I am going to check this from their annual report(s). I will add this one and any other of these electronic and semi conductor companies that have a lot of value (ie cash and little to no LT debt). I believe this is going to be a good sector to hold for next year. Intel, CSCO and possibly AMAT are other High Tech value plays on my radar. I currently only own shares in INTC. Good add on ORCL. I unfortunately sold my entire position when the Sun Microsystem sale was closed. I in fact should have used the proceeds to buy more ORCL shares. They have nearly doubled since the acquisition. EKS

To: Paul Senior who wrote (45749)	12/1/2011 9:02:53 PM
From: Sergio H	Respond to of 78750

RELL completed an asset sale of about $239 million earlier this year. That's where their current cash comes from. I bought the stock then because it was trading at just over cash. You got the co. basically for a dollar. Since then RELL has made an acquisition for about $2 million (that's when I sold) and the asset sale price was adjusted by about $4 million lower. They spent about $8 million on buying back their shares and paying the dividend. When a stock has a large cash position, you have to be concerned about what management will do with the money and if the money is overseas. $48 million of RELL's cash is overseas or about $3/share. That still leaves a large cash position inside the U.S. So, it's about trusting that management will do something with the cash to benefit shareholders. Money sitting on the balance sheet is attractive but its not doing much.