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

To: Paul Senior who wrote (2585)	12/2/1997 10:13:00 AM
From: Michael Burry	Respond to of 78597

Re: UHAL and debt My 2 minute review-in-the-face-of-a-certain-family-member-trying desperately-to-get-me-to-go-to-breakfast: They even present their 10-Q in a confusing way. Looks like they have well over $1B in LT debt, have negative net cash flows after usual cap expenditures and before financing cash flows, and have been borrowing short-term heavily to get liquidity. Ick. I'm probably just not sophisticated enough to see the value here, but since I buy a stock as I would buy the business, I would not want this business. Next I guess I would proceed to looking at price, but my view of management is that they are too selfish and even possibly dishonest. Enough red flags for me. Good Investing, Mike

To: Paul Senior who wrote (2585)	12/2/1997 10:25:00 AM
From: GREATMOOD	Respond to of 78597

To all: Matria Healthcare broke a downtrend line and is moving higher on light volume. This indicates that the selling from "weak hands" is just about done, and IMO we are going back to test the 7 level. Matria has had a couple of problems this year, and the stock price reflects this. The problems are largely behind them now, and some positive future developments could really move the stock up. Zacks has Matria earning $0.41 in 97, and $0.54 in 98. They are the largest provider of home maternity management services. HMOs love Matria because their services reduce the number of days that premature newborns have to be kept in neonatal intensive care units. Matria goes into the pregnant patient's home to administer and monitor the treatment prescribed by the woman's physician. They also have a presence in the fertility service industry. SI: Matria Healthcare (MATR) (#83/85) The company has completed a major restructuring, and is now meaningfully profitable from ongoing operations. (They are still writing off goodwill from a recent merger of "unequals".) The stock only sells for 5 7/8, and the risk/reward ratio IMO is terrific. I am looking for one or more of the following events to unfold by the end of the first quarter of 98. - The stock settles an old lawsuit and the Morgan Keegan analyst puts out a BUY rating, as he indicated he would do. - Matria announces a significant share buyback program for which they are already making preliminary plans. - New products and services add to Matria's revenues, which goes straight to the bottom line because their infrastructure is already in place. (One such product is Johnson & Johnson's new tocolytic Atosiban which could be FDA approved in the first quarter of 98. This could be huge for Matria, because Atosiban would largely replace terbutylene, the current treatment of preference.) - New Wall St. coverage comes on board because of Matria's pristine financial condition, and their potential for growth. (As you can tell from the number of posts on the Matria thread, this stock is not yet a household name. I once cut down a tree on that thread and nobody heard it!) The story is just getting out. Message 2854146 As they say in all such literature, my views are "forward looking" and previous problems Matria had are now well known, discounted, and behind them. At least that's what I'm betting my money on. By the way, HD BROUS & Co. has an ACCUMULATE rating with a 12 month price target for Matria of $12. IMO this is a real Value/Growth story. Happy investing, GM

To: Paul Senior who wrote (2585)	12/2/1997 10:42:00 AM
From: James Clarke	Read Replies (2) \| Respond to of 78597

I had looked at UHAL very closely last time it was at 27 and declined. It is not hard to argue that there is a net asset value of $50 a share here between the storage business, the insurance business and the truck rental business. But there was too much that just looked fishy. Do you understand the history of this company? What really made me uncomfortable was the historical (and projected) level of capital expenditures in the Uhaul business. Also, did you catch 20/20's report a couple weeks ago about how crappy Uhaul's service is? Is a lot of this in the price? Of course. And as a value investor, I should not expect to be comfortable when stealing. But this one was just too much for me.

To: Paul Senior who wrote (2585)	12/2/1997 10:54:00 AM
From: Dan Packer	Read Replies (1) \| Respond to of 78597

re: UHAL - Think it's more complicated than just taking on debt to avoid takeover. The family remains in a controlling position. However there are several branches of the family involved, and only now have the dissident members been bought off. Co looks to me to be one of those situations where a bad management can't kill a great business (or brand name - remember Jartran?). re: debt - with low interest rates, your strategy seems logical. With inflation, it's a no-brainer. However with deflation, things would be reversed. I personally believe that this market bubble is evidence of inflation in financial instruments that will cycle through the economy someday. In which case, having lots of low interest debt instruments out there could be a real asset. IMHO Dan

To: Paul Senior who wrote (2585)	12/2/1997 3:29:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 78597

I took a bit longer look at UHAL. <<just as individuals jump to refinance houses, co's will refinance their balance sheets IMO.>> Yep, they're doing that. I think the cash flow statement says it all - there really isn't good cash flow here with all that capital expenditure. Good Investing, Mike

To: Paul Senior who wrote (2585)	12/2/1997 6:03:00 PM
From: TimbaBear	Read Replies (2) \| Respond to of 78597

Paul..... I have read a bunch of your posts and like the way you think......I don't know if you like small cap stocks or not, but if you are not totally against them, I have found one that you might like to research....the company is Touchstone Applied Sciences (TASA)....sells for 1 1/8....I was introduced to it by the Napeague newsletter and then did my own Edgar search and evaluated the quarterlies for myself....I think the stock is the kind of turn around that you were referring to.....has hit bottom and is in the second or third quarter of the rebound.....I think it is selling at about 1.6 times book and about half of quick net asset value.....if nothing else, might be a good research project....I am not a trader but since doing my due diligence, I bought 6,000 shares for my IRA.....if you do research it, I would be very interested in your thoughts. Tim