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Technology Stocks : International Rectifier (IRF) -- Ignore unavailable to you. Want to Upgrade?

To: Iceberg who wrote (1039)	6/19/1998 2:39:00 PM
From: DanZ	Read Replies (2) \| Respond to of 1712

Ice, If a company's ability to exist as a going concern is in doubt or if they have prolonged losses, I can see their stock trading below book value. If you have a chance to look at the Value Line report in more detail, I'd be interested in how many of the companies have problems that might justify their trading below book, especially the ones that are trading at 30% of book. Our good friend Ron McKinnon had some ideas why a stock might trade below book value. 1. If the assets are worth less at auction than they are being carried on the books. 2. If you write off all good will. 3. Discount fixed assets by 75% 4. Discount inventory by 50% 5. Discount accounts receivable by 80% I agree with Ron on these points, but I think this would only happen to a company that is in liquidation or has big problems. How can IRF go from making money over the past year, improving margins, and reducing inventories through their distributors to a pitiful state that justifies the stock below book value? It has only been a month since everything looked ok. PS to Ron...I hope you don't mind if I copied what you wrote on IRC over here. Thanks for your insight. Here's what I think happened to IRF. A fund wanted out of the stock and there isn't enough liquidity to support it so it tanked. We are now only about a month away from earnings and the buyers are probably scared to own this stock given the beating it took. It might not move much until the earnings are for the current quarter. Dan