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

To: Paul Senior who wrote (5882)	1/26/1999 12:58:00 PM
From: Dan Meleney	Read Replies (2) \| Respond to of 78483

Paul, about UC and FLYT I haven't followed it but I'll look at UC. The stock that paid for SI was FLYT. I meant it went up 20 times the price of SI, not of what the stock price was. I bought at 5/8, before the 1:3 split. I put 7K in and it is worth about 12K now. Rounding that 5K gain down a bit and dividing by the $200 SI fee is the 20x. So I figured it was time to stop mooching and do my share. BTW, SI is switching from the flat fee to $60/6 months. In my DD on FLYT, I estimated I was getting 1 1/4 for my 5/8. Reverse split that's 3 3/4. Current price is about 3 1/4, but I'm concerned that they're about to throw money into black holes rather than give it back to us. I'm willing to lose the gain from any tax loss benefits that tehy might realize with the right acquisition. I'm selling 1/3 today. I'll probably sell the rest over the next few weeks. If only we could find lots of ugly no-brainers like the buy FLYT was. Perhaps watching for "going out of business" signs from recent IPOs would work. I wonder if there are a fair number that realize their technology won't work and they stop their R&D before the cash runs out. Dan

To: Paul Senior who wrote (5882)	1/27/1999 8:31:00 AM
From: Dan Meleney	Respond to of 78483

Paul, re UC I need to review the 10Q, but I went through S&P and Zach's reports. This looks interesting. The keys are all off balance sheet related to the $6B of managed portfolio: Questions I'll be asking myself are: Are the securitizations term deals or CP deals? What's the potential hedge risk? What's the servicing fee? (this could be a significant source of future income) Where is the contingent obligation to repurchase? How big is it? Hom much of the receivables are really overcollateralization for the securitizations? Have writeoffs and delinquencies stabilized? How are writeoffs carried on books? At what % of market value? My first glance tells me there is a reasonable margin of safety between the book value and the price. DD will be needed to see if it is enough to cover the risk. I'll look at this like FLYT but with one off balance sheet item: (liquidation value of assets MINUS all liabilities MINUS my additional estimate of unreserved future losses) / # shares to compare to the current price. Are you looking at this as other than an asset play? Dan