Old School Value

Hey Jae,

I had a look at this stock yesterday. Looks like an undervalued stock. The only question mark is the lack of underlying tangible assets. There is no margin of safety if earnings go down the drain, but looking at the industry and the long term record of earnings the chances of the firm not continuing on the same path are slight. Furthermore the tax shield generated by the high level of intangible assets (which of course need not be replaced) is excellent for investors. This should mean that the firm will be able to continue its dividend policy in the future. The dividend yield of 12% is quite attractive (at half of earnings).The chances of the business being wiped out the next few years are neglible. I do believe it is a business that hinges strongly on contact and might be difficult to be succesful as a web based venture (its most likely source of competition).

Usually I will find many reasons to disgard an investment and move on to the next stock, but this does not seem like a bad purchase.

Reg and thanks for starting the forum

Hope it will a success,

Floris