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7.26.2001 "The wild part is that national health investors NHC is still undervalued. NHC has 11 million shares, at $20 per share, that's $220 million but minus the $40 million it has in cash and securities and you get an adjusted price of a little over $16 so the company has roughly $4 per share in cash. Given the Medicare and Medicaid increases this year, I think NHC will make $1.25 to $1.50 per year. Even if you take the low end at a $1.25 per share, you're still talking about a PE of 12.8. Manor Care is selling at a PE of 47 right now and Beverly has no PE because they are losing money, but if you take their 2001 projections of 40 cents per share, they are selling at a future PE of 25. Given the above numbers, NHC is dirt cheap, and don't forget, Manor Care has a huge lawsuit in California hanging over its head. In addition, given the fact that NHC is expanding and has a smaller market cap to begin with, it's conceivable that NHC could achieve a 15 to 20% growth rate. That's hard to imangine for either BEV or HCR because they are so much larger. NHC is still a great buy. I really think $25 is the right value for NHC, but I think we'll see momentum buying push the stock to $30 per share." TB right likes that summary of the prospects of this company.

7.23.2001 even if one were to accept the current valuation of california coastal communities CALC as a "correct," risk-adjusted price that reflects the inherent legal risk of its land and development holdings, including the fact that as it stands now, it can only develop approximately a quarter of its prime bolsa chica land, it wouldn't be a bad stock to own on the merits of its other california business. at below 5x FCF, this seemingly bargain basement bet on the ever-tight southern california housing market does not appear to have much serious downside.

7.20.2001 would you patronize a chef that wouldn't eat his own cooking? that is in essence what american express is asking of its institutional clients. amex will continue to peddle clo's and such that it has cobbled together in-house, despite that fact that ceo chenault readily admits that amex was clueless when it took a $826m drubbing playing around with these very same instruments.

7.19.2001 was the acquisition of flat-panel display pioneer lite-array the kickstart needed by global-tech appliances to unlock intrinsic value (price/FCF < 3 with virtually no debt)? the recent mini-runup suggests that that might be on some peoples' minds. political risk in china is of course always a threat, but that's where one's margin of safety should serve as a buffer...besides, at this price, and with beijing getting the 2008 olympics, (relatively) good boy china is perhaps a safer bet than it was a month ago.

7.16.2001 and investment in telecom? worse yet, an investment in that horribly trendy area called metro area networks? say it isn't so. "it isn't so." there, you said it. however, TB will soon be watching the shares of riverstone RSTN for any signs of excessive dumpage in coming weeks by newly minted enterasys (the other company cabletron is morphing into) holders who think metro area networks are the local TV news station.

7.13.2001 an interesting situation has developed with the shares of equant ENT. with france telecom buying out about 54% of ENT's shares in exchange for somewhat cryptic "contingent value rights," the plot has thickened. this transaction in and of itself should not have caused the recent precipitous drop from the mid $20s to around $15 where it trades currently: after all, these CVRs are NOT dividends but rather are akin to puts on ENT. each ENT holder received 1 CVR for each ENT share held...an exchange of value. it probably isn't related to optionality, for if anything, misunderstood CVRs are most likely being sold i.e. this is a bullish factor for ENT. the most likely candidate: selling motivated by holders who just do not want any part of this bigger, less transparent entity.

7.11.2001 although taking a stab at a tech stock like roxio ROXI may be a bit premature, this article did bring up one interesting spinoff candidate: the non-diabetes related parts (women's health products etc.) of inverness medical IMA. once johnson & johnson finally distributes the new shares, they may be worth a look. keep this one on active list.

7.10.2001 an interesting article showcasing a do-it-yourself LBO afficianado who has targeted the unlikely tech sector as his stomping grounds in quickly amassing over a billion dollars. the same success factors for any LBO are at work here: buying at the right price, interest coverage, restructuring efficacy, and an iron will.

7.9.2001 well, the expected dumpage of rockwell automation (ROK) has indeed gotten underway. although the spinoff gutted out the core of what was left of the company and left it with all the debt, it's current ebitda multiple of somewhere south of 5x is a bit overdone to the downside, wouldn't you say? with satisfied rockwell collins (COL) holders representing further short-term sources of pressure on the stock, TB is waiting for some big volume selling before scooping up some of this underpriced, brand-name industrial automation equipment supplier.