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   Strategies & Market TrendsValue Investing

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To: richardred who wrote (30121)3/2/2008 12:03:17 AM
From: richardred
   of 72197
Not trying to be egocentric on the Value investing thread. In these uncertain market conditions anything can happen. Its very easy to be humbled. I've done no buying in AIT and still continue to watch. I'll concede it's not a good value currently. What I did notice is strength of the stock during market rebounds. Insiders have been sellers usually not a favorable sign. Along with my previously brief mentions. What still continues to attract me is the markets they serve might hold up well in this slow down.

I have been watching BMS for awhile. Insiders have been buyers of late. I'm getting close to putting an order in.

QEPC is a stock I currently own and think it is a value based on forward earnings and improving conditions. Not very liquid though. I'd be interested in any opinions on it. I'm considering adding to it.

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To: gcrispin who wrote (28175)3/2/2008 1:34:47 AM
From: Madharry
   of 72197
Racetrack operator Magna Entertainment, the parent company of Laurel Park and Pimlico, announced yesterday it had more than tripled its fourth-quarter loss to just less than $43 million, and reported in its financial statement that its "ability to continue as a going concern is in substantial doubt "

The Ontario-based company, one of the major racetrack operators in the country, suffered losses of more than $113.7 million in 2007 despite implementing a debt-reduction plan last September that called for the sale of non-core racetracks and other real estate holdings.

Magna, which also lost $288.3 million between 2004 and 2006, is carrying long-term debt of $879.9 million with $209.4 million of that debt due this year.

The company's financial struggle raises questions about Magna's position when Maryland voters face a slot-machine referendum this November that would provide a huge infusion of income into the state's racing industry. Maryland racing has been battered in recent years as tracks in Delaware, Pennsylvania and West Virginia began realizing revenue from slot machines. None of those tracks is owned by Magna.

Recent analyst reports to the Pennsylvania Gaming Congress found that slot-machine revenue in Pennsylvania last year reached $1.08 billion, according to a story in the Thoroughbred Times.

Maryland Racing Commission Chairman John Franzone has called on Magna to detail its finances at the commission's upcoming meeting March 18.

"It's almost inconceivable how [Magna] can lose that much money," Franzone said. "Are you making mistakes at the window and paying people incorrectly?"

Franzone suggested it would be wise for Magna to concentrate fully on helping pass the slots referendum in Maryland.

"If you get the slots and run them properly -- this ship is the Titanic now and it will change it into the" Queen Elizabeth II, Franzone said. "That would reverse their fortunes dramatically and allow them to gain profitability."

Magna's stock fell 9 cents yesterday, with a closing value of 79 cents per share. On Feb. 14, NASDAQ warned the company its stock would be delisted if the share value didn't rise above $1 by this summer.

"No one can be happy with our financial performance during the fourth quarter of '07 or the year as a whole," said Magna Chairman Frank Stronach during a conference call with investors.

"It's like 'Groundhog Day,' " said Tim Rice, president of Rice Voelker, an investment firm in Louisiana. "Every quarter, the results are disappointing. Every quarter, [Magna says,] 'We're going to sell assets and reduce debt,' and nothing ever happens."

-- John Scheinman

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To: Madharry who wrote (28179)3/2/2008 7:32:08 AM
From: RockyBalboa
   of 72197
mfcaf do you think there is still some hidden value in the stock? khd was the most valuable part of the old merchant bank company.

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To: RockyBalboa who wrote (30213)3/2/2008 8:14:23 AM
From: Madharry
   of 72197
MFCAF I dont know about hidden. the value is very clear to me. If you review the financials you can see that the assets that they own plus owning a swiss bank , and vision centers in china is I believe worth a lot more than the company shares are selling for now. I seem to recall that they got the bank at book value. The key is here though is that you are basically investing on Michael Smith to build this company, and eventually list it somewhere. I havent looked at it recently as i plan to hold it for a decade or so. Its difficult to buy because the bid ask spread is always so large. Its one of my largest holdings.

I looked briefly at and am passing because I dont like the category retail/catalog for something that can be replaced by the internet. So now you have to be able to assess managment capabality of turning this around something sharper image mgmt couldnt do. This is too difficult for me to get my hands around.
turnarounds are harder than most people believe. look at nortel, motorola, sprint. these companies have been struggling for this entire decade, with no end in sight. this analyst was talking about sprint the other day- he said they had 2 problems. they couldn't keep the customers they had and they couldn't attract new customers. apparently they have just written off their nextel acquisition too.

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To: Madharry who wrote (30212)3/2/2008 10:07:47 AM
From: gcrispin
   of 72197
You were wise to stay away from Magna. I sold my share a while ago for a loss after further reading the filings on the loans they received last year.

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To: gcrispin who wrote (30215)3/2/2008 11:23:32 AM
From: Madharry
   of 72197
I find that when I am nervous about management, its been best for me to stay away no matter how cheap the stock seem in relation to the assets. A case that comes immediately to mind was i had a heated discussion at the time with Jeff who brought SEMI here, that management had some sweetheart deal whereby they would skim off an enormous share of the profits from investor whenever the company had a good year. as soon as i saw that I bailed. Now its bankrupt i hear. Alliance semiconductor was another one where management just took whatever advantage they could from shareholders and i got burned pretty badly on that one. I just want to be in situations where management is alligned with shareholder interests and receptive to their needs.

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To: Spekulatius who wrote (30179)3/2/2008 3:35:21 PM
From: Grantcw
   of 72197
I've owned AHT for a month or two now, and in the last 2 weeks I bought small positions in LHO, SHO, and FCH. Maybe I'm early on these HOTEL Reits but most of the positions I entered were at about 35-60% off of the recent highs of the stocks.

Maybe we're entering a recession and things are going to turn for the worse, but I'm still seeing hotel prices go up in D.C., where I generally do business as an SAP Consultant. I'm also still seeing strong nationwide business for our company throughout 2008.

The owner of my small consulting company takes us to Cancun every year for a business meeting. This was my 3rd trip with them and this was the first year that our hotel had less people from the U.S. than from Europe. I think the exchange rate changes have made traveling to this side of the pond easier for Europeans, and I think that European tourism and appetite to buy hotels has been discounted in the valuation of these hotel reits.

But, who knows, we may go down before we go up, but I'm starting to enter positions.


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To: richardred who wrote (30211)3/3/2008 12:32:01 PM
From: Paul Senior
   of 72197
Upped my few shares of BMS today, fwiw.

This diversified packaging company is kind of a steady Eddy. S&P has a 12-mo. target of $27 (Stock at $24.73):

"Our risk assessment reflects the possibility of
softer global economic conditions, higher raw
material prices, and difficulty in integrating
acquisitions. However, BMS has an S&P Quality
Ranking of A, which indicates historically stable
earnings and dividend growth."

S&P rates the stock as "hold".

Perhaps they'll be right. Looks like a buy to me for me though.

Stock has traded every year for past ten at least at 16x earnings. Using S&P's '08 earning est. of $1.85, the stock sometime in next 9-12 months will hit at least $30 (if past ten years results can be counted on again in the this, the 11th year).

If not, a buyer is still holding a stock in a decent quality company which has increased its dividend every year for at least the past ten, and currently yields 3.4%.

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To: Paul Senior who wrote (30218)3/3/2008 1:49:30 PM
From: richardred
   of 72197
FWIW -I followed you in today. Besides your comments. A leader in food packaging. 34% of sales overseas with them owning the biggest packaging company in Brazil. China has so much potential for oversea growth if they can expand their presents. IMO-Although their product lines are diverse. Value added in food packaging will be a necessity. Especially in light of rising food prices witch will need good barrier protection. This to be keep food fresher for longer. The company's stability, timely share price weakness, and untimely technical and fundamentals make it a choice for my IRA. Of coarse most any quality undervalued companies have a percentage of speculative appeal as a target. IMO- In packaging, BMS is most likely to be the acquirer than the acquired. That's where the hope or luck as some would say comes in.

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To: Paul Senior who wrote (30218)3/3/2008 2:47:24 PM
From: Grommit
   of 72197
BMS - i agree that it looks like a nice safe company. and the insider buys are a plus. here's the data i have that seems to indicate a lower PE than 16.

from corp presentation:
10 year sales growth 8%
10 year EPS growth 6.6%
10 year cash flow 10%
target sales growth 6% to 8%
target EPS 10%
target CF 10%

from yahoo:
ROE 12%
industry PE 14
EPS growth 2008 / 2007 = 4%
EPS growth 2009 / 2008 = 9%

so their present earnings of 1.73 = PE of 14.4 (at $25 price)
fairly valued, or a bit overvalued, imo.
prob a good bet, but don't expect the moon.
unless they beat their own expectations / targets.

better bets to make out there...

but an old presentation

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