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

To: Paul Senior who wrote (4231)	6/7/1998 3:43:00 PM
From: Michael Burry	Read Replies (2) \| Respond to of 78473

For value investors with a contrarian approach, a company that I recently bought, Midway Games (MWY), at 12 3/8 just reported heavy insider buying (with the CEO in for over $1M). The company has been slammed since ~90% of it was spun off from WMS a few months back. The shares have now rallied to around 14, but hopefully will fall back. Down 50% with insider buying. What else? Well, IMO, it has great business economics - it is the only producer of home video games (it made Mortal Kombat) that also is big into arcades. So it has a bit of a ready-made testing area. I recently toured the local Target - its games are selling very well. I myself play most of my games on my Nintendo 64 rather than a PC, and I really don't feel the Nintendo is going away (though Midway makes games for all formats, the highest margins are in home video games) because to me at least there are native advantages (including bigger screens and faster 3D play) to dedicated video game systems over PC play. They recently reported they would be less profitable than expected, and the shares tumbled. But there's no debt, a a chunk of cash, a profitable business, solid economics, and large discount to its peers from a valuation standpoint. I attribute much of the fall to weak shareholders. In any case, the insider buying might qualify it for some of the readers here. Another pick of mine, BMC, had huge insider buying at 17 and is now down to 13-14. Good Investing, Mike

To: Paul Senior who wrote (4231)	6/8/1998 8:06:00 PM
From: Robert Hoefer	Respond to of 78473

Paul, I'm glad you still like OLS, as I am sticking with it too. The basic situation has not changed, it's just hard to wait it out. Since I bought in recently and it hasn't dropped much, I don't have much interest in buying more. Now Maverick Tube (MAVK), may be a different story, since it was 21 just months ago, and now it's around 12. If one believes the analysts, it is surely undervalued. But who in his right mind believes the analysts?