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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: TRIIBoy who wrote (4580)	11/12/1998 2:24:00 PM
From: umbro	Read Replies (1) \| Respond to of 18998

TRIIboy, your analysis: Message 6388486 Excerpted here: preliminary analysis of VTCH (mind you this is before the 10-Q). Inventory rose for yet another quarter, and has risen 81.6% versus a sales increase of 51.6%. As all retailers in Brazil, they are feeling the pinch as inventory rises as people stop or slowdown their spending habits. The problem with holding computer parts is that they become obsolete a car does not. I have mentioned in the past how car dealers have 40 days of inventory now, instead of the normal 15 in Brazil, its not different for a PC company. Look at what their cash has done in the last year, even with selling their accounts receivables and doing more dilution and debt, their cash is plummeting. Since we're post-earnings announcement, one of my conerns that they'd surprise to the upside is gone. Still, we are talking about a company in Brazil, with connections (by some reports) to the Brazilian government, so I get a little worried they can write their own rules. As far as obsolescence of PC's goes, there are plenty of examples of governments buying old, outdated equipment, so I wouldn't place to much weight on that argument. The cash burn, however, and increasing days of inventory are undeniable. (disclaimer: no position in this stock.)