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

To: KyrosL who wrote (47399)	4/11/2012 12:26:15 PM
From: E_K_S	Read Replies (1) \| Respond to of 78462

Hi - KyrosL Re: SVU Two items pop out to me in their review: (1) Supply Chain Services EBITDA was down 13.3% YoY, vs. down 5.7% in Q2. I think the YoY comparison is a better measure. It is worth looking at these revenues excluding those from SVU's company owned stores. Is this side of their business growing? Is management looking to grow this side of their business (ie. excluding sales generated from servicing SVU owned stores). I still need to review their annual report(s) to see exactly how much this division has/will grow excluding servicing SVU's owned stores. This is important especially if they plan to spin off this division and/or sell to an interested buyer (like Sysco). There was discussion last year that their logistic division may bid on servicing Target's expansion into Canada. That expansion has been put on hold by Target but could resurface in 2013-2014. This division has excellent warehouse resources that borders Canada and would fit in nicely w/ Target's original expansion plans. (2) Management disclosed their estimated share of underfunded MEPP liabilities at approximately $1.68 billion pre-tax as of year-end. Investors should note that this is based on a market value of assets and actuarial value of liabilities. We estimate the fair value of the underfunded liability to be significantly higher. I believe Clownbuck raised this as a concern in one of his post. That was a good find as I overlooked this completely in my review. It's a huge potential liability. Otherwise, it was a pretty good report w/ really no new surprises other than MAYBE that their same store sales slide has slowed and/or reversed. --------------------------------------------------- It's item #2 that is a deal breaker for me. Their unfunded liability represents upwards of $7.50/share. That (to me) is not a manageable number and I have not seen any explanation by management how they plan to make up this deficit. GM resolved their unfunded liabilities by entering into a a pre arranged bankruptcy. This was the solution for the airlines too. So what is the exit strategy? Spin off the logistic business to shareholders and move the rest of the business into a pre arranged bankruptcy to discharge their huge unfunded pension liabilities? KyrosL, what's your exist strategy on your recent buys? Are you holding shares for an eventual long term play. If so, what's your value target price? I still own a position in the company but am not sure how to play it. My avg cost is in the mid $7's so I could sell out w/ a minimal loss. EKS

To: KyrosL who wrote (47399)	4/11/2012 12:34:55 PM
From: thatsnotluck	Read Replies (1) \| Respond to of 78462

KyrosL, great call on SVU. I still don't see it, but you did and congrats.

To: KyrosL who wrote (47399)	4/30/2012 9:36:41 AM
From: KyrosL	Read Replies (3) \| Respond to of 78462

SVU -- sold it this morning, earlier than I planned. I have been waiting for a dividend announcement, but it has not come yet. Also there was a downgrade this morning. The next catalyst for SVU will be next earnings announcement which is still way off, and the dividend. There should be no problem with the dividend unless there are some debt covenants that interfere. No time to look for those. Lightening up on my already light stock allocation in advance of my annual trip to Greece.