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

To: Michael Burry who wrote (6855)	4/20/1999 10:42:00 AM
From: Norm Demers	Respond to of 78530

Check out SDTI as a value play. Do your own DD. They own RSA and 2.6 million shares of VRSN. Making money. .12 a share this quarter. They have an internet angle to their business, RSA,VRSN, and new PKI products. P/E is listed at about 12. They are emerging as the standard in data encryption and security in the world. Worth your time to do the research. Currently trading about 18.

To: Michael Burry who wrote (6855)	4/20/1999 4:31:00 PM
From: Mike 2.0	Read Replies (1) \| Respond to of 78530

Mike & all, how low would Eli Lilly (LLY) have to go before being considered a "value"? Of course, LLY lost a lot of ground after its Prozac sales were off 4% from same qtr last year, primarily due to advance buying from Q498 as vendors stocked up in anticipation of a price increase. As excess inventories are worked down this should IMO prove a fleeting temporary phenomenon. Using existing earnings est's of $2.35 and $2.69 for Y/E Dec 99 & 2000 respectively, LLY is trading at 31x 1999 fwd earnings and 27x year 2000 fwd earnings. Although 10-13x seems the "magic" number for "value" oppty's here, LLY hasn't traded at a multiple of 31x forward earnings since late March 1998, when it did so for a _very_ brief period (calculation: 1.91 actual FY 98 earnings * 31 PE = ~$59.33...see chart:) stocksite.com I don't believe the dip in Prozac sales are indicative of a trend and the annuity it provides (monopoly I believe thru 2003) commands a higher multiple. What IS holding me back is that their recent earnings release predicted next qtr results are expected to reflect "some" additional working down of excess inventories as well. Thoughts welcome.