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

To: Paul Senior who wrote (6231)	3/7/1999 11:58:00 AM
From: Michael Burry	Respond to of 78481

IGT popped up on my screen just a few days ago as hitting possible value territory. My concern, since we're supposed to be discounting cash flows and such back to the present ( with one methodology or another), is even if this legislation doesn't pass, there's the risk it might in the future. That risk should materially diminish the current intrinsic value of the firm. Since I don't recall anyone ever bringing up the possibility of this law during IGT's hayday, I'd say that the framework for valuing IGT is markedly changed even if the law doesn't pass very soon. That said, should the law matter? IGT and Anchor discount their machines in return for a cut of the revenues. Those machines, if priced entirely in the present value, would be worth much, much more, and IGT's average selling price per machine would go through the roof. BUT that makes IGT more cyclical IMO, with less reliable earnings. The market, again, will make the stock more volatile, and discount the stock for not having as consistent earnings. I think the market may be overdoing it here, but I'm interested to see how low an otherwise company like IGT can go. It and CPU go on my acute watch list. Good investing, Mike

To: Paul Senior who wrote (6231)	3/9/1999 11:04:00 AM
From: Robert Hoefer	Read Replies (2) \| Respond to of 78481

RJR Nabisco to split food, tobacco units. Your comments on value? Michael Price, in a Barron's Roundtable once called it "The most undervalued stock in America," but patient value investors have been waiting a long time for the value to come out. What's your current take on the value of the Nabisco shares and the tobacco company? Here is the release from Reuters: Food and tobacco giant RJR Nabisco Holdings Corp. (Nyse:RN) said Tuesday it will sell its international tobacco business to Japan Tobacco for $8 billion and plans to split its U.S. tobacco and foods businesses. Investor Carl Icahn, who holds a 6.6 percent stake in RJR, has been pushing for a split of the company.Industry analysts have said the shedding of the international tobacco unit will shore up RJR's business overall and help defend itself against any proxy battle. RJR, maker of Camel, Salem and Winston cigarettes, said Japan Tobacco will buy all business and trademarks from the international unit.