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Strategies & Market Trends : Low Price/Cash Ratio Value Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Anaxagoras who wrote (159)	6/3/1999 4:39:00 PM
From: Elroy	Respond to of 1931

Well, CDCO is no longer in this category. They were trading aroun d$1.50 with $2.80 in cash when the thread first spotted them. Now they are at about $7 with $1.70 in cash, and are actually trading like a growth stock! Folks may want to put CTIC on their radar screens. Company has about $2.50 in cash, and is trading around $2, but it is a biotech, burning cash at the rate of about $8 million per Q, and they just got one of their trials stopped. Still, at some point, the organization must have some value.

To: Anaxagoras who wrote (159)	6/3/1999 5:07:00 PM
From: Q.	Read Replies (1) \| Respond to of 1931

Yes, Anaxagoras, your explanation of valuing the stock from the balance sheet is 100% correct. I couldn't have said it any better. John

To: Anaxagoras who wrote (159)	6/4/1999 1:16:00 AM
From: Bob Rudd	Read Replies (1) \| Respond to of 1931

Anax: <<However, if one thinks of things in terms of PBRs, he's thinking in terms of liquidation; I submit that when one looks at a company in terms of cash per share he is also looking at things from this liquidation perspective. Does this sound right so far?>> Wee tiny point of difference in perspective...Margin of safety & extraordinary value rather than expectation of liquidation. PBR is commonly used along with PSR & low PE just to find undervalued businesses. The idea with value investing is to find something that has been ignored or missed by Mr. Market. Often this is subtle, like undervalueing the technology of a company...perhaps the case with the company in question. But sometimes it's blatant like cash per share after prior claims exceed common share price. Then you get the business for free. But you'd still like to make sure they're not going to burn down the store or blow the cash...stupid acquisition, etc. <<, take the cash, subtract the debt, and then subtract the liquidation value of any preferred; take the remainder and divide by the number of common shares outstanding, and that's the important ratio>> If you are looking for true net-net, I beleive you would need to take the face value [Issue price] of the preferred...not the "liquidation value" since the preferred is technically senior to the common. Although in cases of actual liquidation, it's usually a bit messier and often the preferred is given little preference to the common ..they both get screwed. bob