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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: F. Lynn who wrote (943)	3/20/1998 10:28:00 AM
From: Eric Klein	Read Replies (1) \| Respond to of 2506

Your points are well taken. I haven't shorted these stocks because I don't know the industry well enough to try to predict where they are going. On a stock screen, though, they jump out at you because of their lofty valuations. Even with no interest, no D&A, no taxes, and 40% margins, CCU would still sell for a P/E (and P/CF) of 30, which does not indicate a low priced stock. There has been an acquisition boom in radio, but acquirers have had to pay high prices for stations. IMO this industry is overvalued, and CCU is the prime example. The outdoor advertisers seem even more overvalued. I can somewhat understand the arguments in favor of radio, but fail to see why billboards are suddenly so valuable, especially when tobacco ads are one of their main sources of revenue.