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Non-Tech : GRIN (Grand Toys International Inc) -- Ignore unavailable to you. Want to Upgrade?

To: Frank McVerry who wrote (133)	2/7/1999 4:22:00 PM
From: Frank McVerry	Read Replies (1) \| Respond to of 495

GRIN's ongoing trading conditions and Peter Lynch As we await the arrival of GRIN's 4th quarter earnings, sometime during the next 2 weeks, perhaps it would be worth taking an up-to-date look at the three problem areas for GRIN during the last twelve months, namely currency, ToysRUs and transportation costs. CURRENCY - good news here. The CAN$ continues to claw back the lost ground against the US$ and in fact the improvement appears to be accelerating. Here are the numbers since the Sept98 low. (value of CAN$ in US$). 1SEP 64c, 1OCT 65c, 1NOV 65c, 1DEC 65c, 8JAN 66c, 5FEB 67c An improving CAN$ directly translates to improving gross profits for GRIN. ToysRUs - Interesting to look at the effect of ToysRUs' woes on other toy companies. TOY is suffering a lot from competition from the big discounters, such as Walmart and Kmart. Check this link for the major effect TOY has had on Mattel - a 69% loss in earnings, year-on-year ! biz.yahoo.com Now GRIN has suffered nowhere near as badly as this (after all, they supply Walmart and other competitors) but TOY is still a significant customer. Fortunately, the analysts are predicting a turnaround for TOY during 2Q of '99. If this happens then GRIN, as their distributor, may see improved orders from them during the first quarter...we'll see. TRANSPORTATION COSTS - what is happening here is an indirect (and negative) effect of the Asian crisis on North American importers. Imagine if you will, the pre-crisis situation where full container ships flow equally east and west across the Pacific. Now during the 'crisis', Asia basically can't afford to import anything but N America still wants the same imports (in fact we want more now as the cost of Asian goods get cheaper). The only way to continue this unbalanced flow is for container ships to return empty to Asia - so who pays for the huge fuel/crew costs of that trip ? Pre-crisis the Asian importers paid but now this cost must fall onto the N American importers. The question is: Is this situation getting worse, better...what ? Well, IMO it can only really improve as Asian currencies/economies recover. Here is a link with occasional articles on this subject: ttnews.com Finally, the latest online edition of WORTH magazine has an article by Peter Lynch where his Wall Street colleagues do some stockpicking. worth.com The interesting part is his introduction where he discusses the state of the market. He clearly likes the small-cap area and sums it up in one word...OPPORTUNITY!!! FWIW Frank