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

To: Mike 2.0 who wrote (6229)	3/7/1999 1:16:00 AM
From: James Clarke	Read Replies (2) \| Respond to of 78476

re: CPU, DBRN, IGT, HSC, reason #6545 to hate the government... Are there flaws in CPU's business model and do things look bad now? Yes. Is the internet a threat? Yes. These things would have been nice to know if one owned the stock at 19 last fall, or if one were into shorting at that time. But now with the stock at 6, analysts bailing, and institutional investors in what looks like a panic sell, I would be asking different questions. My first would be what is my downside risk here? Specifically, is it zero (i.e bankruptcy)? With $400 million of cash on the balance sheet offset by $200 million of debt (the market cap is about $550 million), I would have to think that this company is going to be around for a while. That's not to say you couldn't lose a lot of money here - only that if CPU is a terminal case it is going to be a slow death. Then I think, these guys are the leader in their business and do an awful big portion of industry volume. Don't you think the manufacturers might need these guys around? I don't know this business well, and what I do know I don't like, but what I do know is that when I want to buy something for my computer this is where I go. If the balance sheet is as solid as it looks, we're fishing in the right pond here. Any thoughts on another of last week's roadkill? International Gaming Technology (IGT)? Something like 80% market share in slot machines, now trading at its lowest multiple since 1990. I haven't done much work on this one yet, but is there anybody out there who knows it well? Its probably worth a look if you're into weird businesses like I am. (Especially weird businesses that make huge returns on equity, mint cash, dominate their markets, and are down over 50% from their high.) Also in Barrons, Dress Barn (DBRN) sounds too good to be true. But its true. I looked at this one last fall but picked a couple other small cap wrecks. Its pretty close to the price I looked at it at (though that might change at the open on Monday). This one is worth a close look as well. I figured out my taxes today and I found that I have to do some selling whatever my view of the market. Hmm, which of my undervalued securities should I sell to pay my fair share for all those government services I value so much? Ouch. Like I needed another reason to hate Clinton. If anybody knows Harsco (HSC) well, please e-mail me privately. JJC