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

To: Michael Burry who wrote (3172)	2/9/1998 12:03:00 AM
From: jeffbas	Respond to of 78595

Yes. I bought DPMI at 26 1/4, which at that price I like better that BMC in every respect - p/e, price/book, market position, balance sheet, big brother Dupont, outlook, etc. Basically flat to slightly lower recent sales and earnings. Unfortunately, instead of being way early as usual, I had barely gotten my feet wet (gradual buying being my style) when it took off on me. "Glass half empty" suddenly switched to "glass half full" on this volatile, institutional stock because of latest "DUV" announcement. It might be worth 20 minutes of your time just to look at this as what I regard as a lesson not to degrade your standards since really good opportunities do come along. The other stock I continue to buy, as recently as last week, is CALM. Although I would buy more in the mid 6's or less, I am thoroughly wet on this one and don't care if someone else sees my point of view and buys or not. I have mentioned this previously on this thread, I believe. It is the largest factor ($300 million sales) in the egg producing (commodity) business. MIKL is the nearest much more expensive somewhat comparable public company. The company has been building modern new facilities and buying smaller farms in its territory for years (at book value, believing over time they can be made to be worth 1 1/2 to 1 3/4 book). Last year it made about $1.25. This year will be closer to $.75 because of lower egg prices in the first half (they are up now) and lower export sales (strong dollar probably). Book today is approaching $6.50 (no good will), or about the current price. Mgmt plans to continue this strategy and looks for sales growth of perhaps 10-15% next year from internal expansion and acquisitions. So what is so hot about this company in an industry with no growth to speak of. This is a conservative company with a sound strategy I believe. The whole industry is consolidating gradually and as a result, in management's opinion, becoming less volatile. The company recently did a private debt financing with its primary lenders, insurance companies, refinancing and raising more money, WITH AN INVESTMENT GRADE RATING from Duff and Phelps. They just instituted a modest penny per quarter dividend. In my opinion, it is starting to appear on some food analysts or institutions screens and will be bought. If you feel as I do that the company can have a book value of perhaps $10 in three years and because of some degree of recognition sell at say 130% of book, you are talking about a double in 3 years that you don't have to follow every day or lose any sleep over. Management (and ESOP) owns most of the company and thinks they are worth $10-12 today, but I always take those kinds of statements with a large grain of salt. I also think SEMI is interesting, although it is a high debt load, much more speculative, nationwide, semiconductor distribution company with $265 million sales. Samsung is a major (15-20%?) supplier (which could be a problem if Samsung added larger US distributors for its products). Book about $1.25, price Friday $1.75. Seems to have turned around after some missteps resulting in a poor 1996. Outlook for $300 million sales in 1998 which would mean $.25 -.30 in earnings (fully taxed). A Director recently added 15,000 shares at around $2, increasing position by material percentage, for first insider buy in years. Small amount of money, but interesting. Own it as well.

To: Michael Burry who wrote (3172)	2/10/1998 1:59:00 PM
From: Wallace Rivers	Read Replies (1) \| Respond to of 78595

I have mentioned this to the thread before at lower prices, but I would like some input in light of the recent acquisition announcement of Arbor Drugs (ARBR). The stock of Phar-Mor (PMOR) seems significantly value when one compares it to Arbor in certain key statistical ratios: P/B ARBR 3.9 PMOR 1.3 P/S ARBR 1.07 PMOR .1 CR ARBR 2.3/1 PMOR 2.9/1 PE ARBR 30 PMOR NM* *PMOR reported its first profitable Q last report, I believe the company can earn .60 this year. PMOR certainly has significantly more debt on the books than ARBR. It also has more cash assets, as well. Both companies have approximately $1 bil. in sales. It could be argued that ARBR is a much more seasoned company, dominating its particular market (Detroit), while PMOR has the stigma of a company emerging from a scandalous past. That being said, I still don't think that PMOR should trade at such an extreme discount to ARBR. AOL valuation still makes me sick, with analysts upping their price targets at will. 50, 75, 100 times earnings, who cares!