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

To: Tim Cruise who wrote (5032)	9/20/1998 9:17:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78471

Tim, re: PFG. The story is a sad one :>( Yes, I still own PFG (too embarassed to tell you where I started my position, but I bought more at 12, 10, 5, 3, and 1+. Never before have I experienced such a rapid drop-YIKES! Way underwater on this one. Lot of money being made past few weeks though by day traders as stock has bounced around 2-4. But that's not me. Nice overview of situation in 9/14/98 WSJ. Company has tried to grow through acquisitions ala Conseco. But they've over extended themselves either through too much debt or by their (in)ability to integrate and manage their operations and acquitions. Investor confidence has waned (dramatically!) as they've failed to secure additional funds from an outside source, from their failure to sell one of their operations at the price they expected, from subsequent or consequent earnings losses, and from the resultant insurance investigations, ratings agency downgrades, and change of PFG management. In this, as well as other insurance stocks I follow or own, a key valuation statistic for me is book value. It's become very difficult (for me as well as most others, I think)to understand what the PFG bv actually is. I'm disappointed to read in the WSJ, that an analyst following the company believes it to be about $8.1/2 to maybe 12.1/4 per sh. (depending on how some goodwill items are treated). Now the company, according to the WSJ and my interpretation of some of the recent co. announcements is trying to sell some of these assets "to pay off its steep debt". This adds more uncertainty. If I did not already own more than I wanted of PFG, I would add to my position at the stock's current 2.3/8 price. Over time, with a new management team, they should be able to resolve some of their issues, and I see no reason why the stock wouldn't trade for 2/3 of book. This would be a double from the current price (assuming bv really is about 8+). I've been thinking of buying more at these (low 2)levels. What's holding me back is, as I say, that I already own more than I'd like, and I've been so wrong on this stock. Paul Senior