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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (1162)	1/21/1998 10:32:00 PM
From: DLS	Respond to of 18691

Roger, it is shaky. These guys provide laundry services for Apartment properties. What this means is that they lease to the complexes the machines and agree to maintain the laundry rooms. They typically try to sucker the owner of the complex into a 10 year deal for which the laundry company would pay maybe $20,000 or more (for a 200+ unit apartment property) upfront in exchange for the lion share of the profits. The laundry company typically is responsible for collecting the coin and distributing the appropriate share to the owner of the complex. These deals have a tendancy to fall apart after a few years. (the first thing a new owner does after purchasing a complex is hire a lawyer to bust the laundry deal). The only way a company like WDRY can grow is to buy companies with existing contracts unless they are effective in beating the substantial competition to the few complexes in any given market that is not already tied up. DLS

To: Roger A. Babb who wrote (1162)	1/22/1998 12:04:00 AM
From: Mike Farrar	Read Replies (2) \| Respond to of 18691

ASIA DOWN AGAIN Sound like a broken record? Hong Kong down 4.4%. Singapore down 3.58%. South Korea down 3%. Japan down 1%. Indonesia down 6%. Jeff

To: Roger A. Babb who wrote (1162)	1/22/1998 12:52:00 AM
From: Brad Davies	Read Replies (3) \| Respond to of 18691

Roger, I have noticed your comments regarding WDRY. When you first brought it up here, I took a look. It seems to me that your main argument for shorting this stock is their excessive leverage. I can tell you, from first hand experience, that the apartment coin laundry business is a very good one. Revenues are very predictable. You can usually count on betweem 10 and $20 per suite per month, depending on the suite size (that is an indicator of suite population). The company would then have to pay the landlord some percentage of the gross, or some other form of compensation. In my view, provided interest rates are favourable, this is a great business to lever. On existing revenues, the company could almost be priced like a bond. I have no position in WDRY. I thought about going long when I first looked at it a month ago. I think there are much better shorts out there. Good Luck. Ron