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alstry (< 20)

Altsry's Pick 4 To Hit the Floor



March 11, 2008 – Comments (1)

At the track, some people bet to win.  Others bet to show.  Some like an exacta(1st and 2nd) and those that are really adventurous play the trifecta(1st, 2nd, and 3rd horses sequentially).  But me, I like the pick 4 when I want to knock it out of the park.

1st-SPF-Management is being sued for providing false guidance.  When you can't trust the jockey, you never know when he might whip the horse in the gonads to knock him off his game. 

2nd-CTX-Payables higher than backlog-that means liquidation and liquidation fast.  Selling assets for $0.16 cents on the dollar means you are going to run out of assets before you cross the finish line.

3rd-RYL-Backlog way to low.  When you don't eat enough carbs the night before, energy will be a problem to make it the distance.

4th-BBY-Spent down billions in cash to buy back shares and sells a bunch of product on deferred financing.  Little cash going into a consumer slowdown and increasing defaulting debt, not necessarily lethal but definitely adds unnecessary weight giving the other horses an advantage.

It is now post time.

1 Comments – Post Your Own

#1) On March 11, 2008 at 3:58 PM, DemonDoug (31.50) wrote:

SPF and CTX are hosed.

BBY will survive.

I'm not sure I agree with the assessment of RYL - their cash/debt seems manageable enough.  I think they have a good chance of going under like all HB's, but I'd put HOV and WCI, just to name two, way above RYL in the bad investment category.  For hov, 100m is their cash flow target - um, they've got over 2b in debt.  Talk about using a thimble to bail out the titanic!

It is absolutely asinine that they were up 16% today.  I guess you can get those types of moves with a short % above 60% but still.  Why anyone thinks HOV has any value is all is puzzling to me. 

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