November 19, 2001
2003 7.95 bonds are trading at 101.75 with an YTM of 6.523. BB rated. Graham Ratio without intangibles is G1 of 124.26 and G2 of 62.13. Intrinsic value getting slightly better from a year ago. As always watch the debt to equity, inventory levels and debt ratings. Watch for continued cost savings from cost reduction program. Something else to watch is the share outstanding which have decreased over the years (much of the debt was caused by the Dutch auction last year at around 17 per share. Stock price definitely has the appearance of being pricey, but if earnings and operations can get back to a more stable environment, this could be a long-term hold. At this point the focus will be on keeping this position under weighted with a < 2.5 % portfolio position.