Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Paul Senior who wrote (5208)	10/30/1998 12:16:00 AM
From: Shane M	Read Replies (1) \| Respond to of 78525

Paul, Starting to buy SPF: Standard Pacific A company in the manufactured home business that I find attractive is Champion Enterprises, CHB. It's more expensive on a book value basis than SPF or BZH, but you get a better ROE, and the book value for CHB is growing more rapidly, PE for each is about the same. On a lighter note: the name Standard Pacific brings back bad memories of a recent stock price implosion I suffered through in Southern Pacific Funding. <g> That is reason enough for me to look elsewhere... :-) If you have an opinion on CHB I'd be interested to hear. Shane

To: Paul Senior who wrote (5208)	10/30/1998 12:31:00 AM
From: jeffbas	Read Replies (2) \| Respond to of 78525

Some comments Paul. All the homebuilders are doing poorly in the market, anticipating a poorer economic environment to come here. If it does not occur you will probably do well. On TMO, I know a great deal about this "family", having followed it for 15+ years. You might want to read my (critical) posts on it on THI on Yahoo. I am much less enthusiastic now. The company's operating income performance, without gains from subsidiary stock sales and using something more reasonable than 40 years(!) to amortize huge amounts of good will would be much, much less impressive. In my opinion, they were fabulous at financial engineering. But how could you lose if the price you paid for any acquisition did not really matter because the resulting good will was amortized over a period so long, and your financial engineering allowed you to raise capital very cheaply by selling high P/E stock. They were less good at running businesses as has recently become apparent with the financial gains disappearing and many subsidiaries taking charges to restructure operations. I estimate that reported earnings would be about 25% lower if goodwill were amortized over a period 1/3 as long as the 40 years used. In sum I once thought this was a great company. I don't any more.