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

To: Dan Meleney who wrote (7013)	4/30/1999 5:17:00 PM
From: Paul Chapman	Respond to of 78719

Dan, the best site I've found is rereader.com, and I've found other data confirming figures in the $50K/acre plus range. I think some of the previous analyses were too cursory. For 1998, Scheid's gross margin was 55% and the net margin was 21% in the worst year in the past five. Those are the figures that are important, not the revenue per acre. If you don't like Scheid's margins, how about the return on equity? The industry average is around 6%, while Scheid produced 25% in 1996, and 18% in 1997. I don't have the figure for 1998. Also the Canandaigua purchase of Franciscan Estates is the best indication of value around. They purchased at 4.5 times revenues. The price per acre is a little fuzzy since I don't know what the value of Franciscan Estates' wine inventory is. Premium wines are a minor part of Scheid's business. I still argue that the Canandaigua purchase provides a benchmark for Scheid's value. At the very least, it is worth $15 per share.