Comments on: Morningstar Vs Old School Fair Value Estimation http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/?source=rss Perform Stock Valuation Automatically Sat, 11 Feb 2012 19:05:47 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Cool http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-4821 Cool Wed, 10 Mar 2010 14:10:52 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-4821 Cool, just what I needed Cool, just what I needed

]]> By: Tom http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-3874 Tom Thu, 10 Dec 2009 03:42:01 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-3874 Hey, I'm trying to purchase the spreadsheets however do you have an alternative non-paypal route to purchase? it won't accept my credit card. Hey,

I’m trying to purchase the spreadsheets however do you have an alternative non-paypal route to purchase? it won’t accept my credit card.

]]> By: Jae Jun http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-3873 Jae Jun Thu, 10 Dec 2009 01:05:46 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-3873 Well in the end, I never took action and missed out on a 10 bagger. Had I listened to Jim and actually taken the initiative to make my way to a Walmart and simply check it out, I probably would have changed my mind. Jim capitalized on the opportunity and was rewarded. Well in the end, I never took action and missed out on a 10 bagger. Had I listened to Jim and actually taken the initiative to make my way to a Walmart and simply check it out, I probably would have changed my mind.

Jim capitalized on the opportunity and was rewarded.

]]> By: Tom http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-3871 Tom Tue, 08 Dec 2009 19:35:46 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-3871 Whatever happened to the analysis on CPY? that was an interesting exchange. In hindsight, the company did excellent going from $1 to $20 in the last 52 weeks. However 2009 doesnt look so good with the negative FCF figures. Whatever happened to the analysis on CPY? that was an interesting exchange. In hindsight, the company did excellent going from $1 to $20 in the last 52 weeks. However 2009 doesnt look so good with the negative FCF figures.

]]> By: Jae Jun http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-831 Jae Jun Mon, 24 Nov 2008 08:03:48 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-831 I came across the idea while I was at work and looking at some graphs. It's simply a radar graph in excel. I haven't gotten to the part of automating it though. Need to think about how I will incorporate it. I came across the idea while I was at work and looking at some graphs.
It’s simply a radar graph in excel.

I haven’t gotten to the part of automating it though. Need to think about how I will incorporate it.

]]> By: Jim http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-830 Jim Mon, 24 Nov 2008 03:45:14 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-830 I like the chart. Is there a copy available that I could implement into my analysis'? I like the chart. Is there a copy available that I could implement into my analysis’?

]]> By: Jae Jun http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-828 Jae Jun Mon, 24 Nov 2008 01:28:22 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-828 Yes spot on. The closer it is to the outside, the better. The holy grail of all companies would be a hexagon. Something that has constantly eluded me. I may have to adjust risk as I read more into it but at this point in time, that how I see the company. I just thought of this chart recently so I'll do a quick post to let people know how I intend to go about rating companies now. Yes spot on. The closer it is to the outside, the better. The holy grail of all companies would be a hexagon. Something that has constantly eluded me.

I may have to adjust risk as I read more into it but at this point in time, that how I see the company.

I just thought of this chart recently so I’ll do a quick post to let people know how I intend to go about rating companies now.

]]> By: Jim http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-827 Jim Mon, 24 Nov 2008 01:12:09 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-827 I don't read charts so you'll have to help me with this. Is your chart saying the company, on a scale from 1 - 6 (6 being extreme), is extremely under valued? My answer is yes. Concerning high growth factor, the rating is a 3? I'd give it a 4 but 3 is suffice. You'll have to clarify risk. Risk means so many different things to so many different people. Well managed is a 5? I would agree with that. Possibly a 6. Good financial health is a 3? I'd say at least 4.5 to 5. Strong Moat is a 4? Strong Moat as in durable competitive advantage? I'd give it a 5. If I'm reading the chart correctly, it is very close to how I feel. I don’t read charts so you’ll have to help me with this. Is your chart saying the company, on a scale from 1 – 6 (6 being extreme), is extremely under valued? My answer is yes. Concerning high growth factor, the rating is a 3? I’d give it a 4 but 3 is suffice. You’ll have to clarify risk. Risk means so many different things to so many different people. Well managed is a 5? I would agree with that. Possibly a 6. Good financial health is a 3? I’d say at least 4.5 to 5. Strong Moat is a 4? Strong Moat as in durable competitive advantage? I’d give it a 5. If I’m reading the chart correctly, it is very close to how I feel.

]]> By: Jae Jun http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-825 Jae Jun Mon, 24 Nov 2008 00:30:06 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-825 Jim do you think this is a good representation of CPY? I still havent had time to look into it. <img src="http://jjun0366.googlepages.com/spider-cpy.png"> Jim do you think this is a good representation of CPY? I still havent had time to look into it.

]]> By: Jae Jun http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-795 Jae Jun Fri, 21 Nov 2008 23:50:09 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-795 It reminds me of Photochannel (PNWIF) which takes care of all the back end solutions for costco and some major businesses I cannot recall. If you get an analysis written up, would you mind doing a guest post here? It'd be great to hear from another perspective. Hopefully I'll have time to look over it on the weekend also. Your beginning to get me really interested, as I am also an avid photographer and understand what is involved. It reminds me of Photochannel (PNWIF) which takes care of all the back end solutions for costco and some major businesses I cannot recall.

If you get an analysis written up, would you mind doing a guest post here? It’d be great to hear from another perspective.

Hopefully I’ll have time to look over it on the weekend also.

Your beginning to get me really interested, as I am also an avid photographer and understand what is involved.

]]> By: Jim http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-794 Jim Fri, 21 Nov 2008 23:18:34 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-794 I can answer some of those questions now but I'll give you a detailed answer to question number 4 by tomorrow. 1. Here's the exact verbiage the company used in its press release: "CPI Corp. today announced that its Board of Directors declared a fourth quarter cash dividend of 16 cents per share. The dividend will be paid on December 1, 2008 to shareholders of record as of November 24, 2008. As of November 7, 2008, CPI had 6,486,078 common shares outstanding. CPI is the leading portrait studio operator in North America offering photography services in approximately 3,100 locations in the United States, Puerto Rico, Canada and Mexico, principally in Sears and Wal-Mart stores. Source: CPI Corp. " 2. The only expansion in Sears business that I see, and its pure speculation, is that Mr. Lampert has been buying up controlling shares of both AutoNation and AutoZone for quite some time. What would that do for CPI's business? I don't know but I would venture to say that CPI would be unaffected by it. Sears is in the business or Real-Estate and their sales of products is just an added benefit to their primary focus which is real-estate. The retail benefit of CPI really comes from Wal-Mart, although they've been a successful business long before their Wal-Mart relationship. Before Wal-Mart, their growth had been slow but steady. 3. They are the #1 leader of their industry. The competitive advantage they have is the global relationship they have with both Sears and Wal-Mart. It would cost a competitor approximately $231.52 million just in Plant/Property/Equipment in order to build a competitive business. That competitor would spend $231.52 million for the chance of receiving approx. $100 million in revenue. That is a huge barrier to entry for CPI. I personally use CPI's product. I have a digital camera in which I take my digital card into my local Wal-Mart store. I walk up to the machine and stick my digital card in the machine and for .15 I get a printed picture. Or I can have the professional that's working behind the desk do it for me if I'm not competent enough to figure out how to work the machine. Over the weekend, I'll put together a detailed analysis of the company so it will be easier to understand. It may take me a few days because I'd like it to be detailed. I really feel this is a great company and I'm hoping I'm right. Have a great weekend. I can answer some of those questions now but I’ll give you a detailed answer to question number 4 by tomorrow.

1. Here’s the exact verbiage the company used in its press release:

“CPI Corp. today announced that its Board of Directors declared a fourth quarter cash dividend of 16 cents per share. The dividend will be paid on December 1, 2008 to shareholders of record as of November 24, 2008. As of November 7, 2008, CPI had 6,486,078 common shares outstanding.

CPI is the leading portrait studio operator in North America offering photography services in approximately 3,100 locations in the United States, Puerto Rico, Canada and Mexico, principally in Sears and Wal-Mart stores.

Source: CPI Corp. ”

2. The only expansion in Sears business that I see, and its pure speculation, is that Mr. Lampert has been buying up controlling shares of both AutoNation and AutoZone for quite some time. What would that do for CPI’s business? I don’t know but I would venture to say that CPI would be unaffected by it. Sears is in the business or Real-Estate and their sales of products is just an added benefit to their primary focus which is real-estate. The retail benefit of CPI really comes from Wal-Mart, although they’ve been a successful business long before their Wal-Mart relationship. Before Wal-Mart, their growth had been slow but steady.

3. They are the #1 leader of their industry. The competitive advantage they have is the global relationship they have with both Sears and Wal-Mart. It would cost a competitor approximately $231.52 million just in Plant/Property/Equipment in order to build a competitive business. That competitor would spend $231.52 million for the chance of receiving approx. $100 million in revenue. That is a huge barrier to entry for CPI. I personally use CPI’s product. I have a digital camera in which I take my digital card into my local Wal-Mart store. I walk up to the machine and stick my digital card in the machine and for .15 I get a printed picture. Or I can have the professional that’s working behind the desk do it for me if I’m not competent enough to figure out how to work the machine.

Over the weekend, I’ll put together a detailed analysis of the company so it will be easier to understand. It may take me a few days because I’d like it to be detailed. I really feel this is a great company and I’m hoping I’m right. Have a great weekend.

]]> By: Jae Jun http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-793 Jae Jun Fri, 21 Nov 2008 22:03:50 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-793 It's an interesting story. Additional questions. 1.Dividend payment confirmed for shareholders as of Nov 24. This is very enticing. May take a nibble. 2.Walmart may be expanding but what about Sears? 3.The level of photography? Cheap? Expensive? 4.What was the reason for the sharp decline in FCF in 2004-2006? Was it due to heavily investing in the business and do you think the turnaround already happened in 2007? I'll start reading some reports and try to get a better picture. It’s an interesting story.

Additional questions.
1.Dividend payment confirmed for shareholders as of Nov 24. This is very enticing. May take a nibble.
2.Walmart may be expanding but what about Sears?
3.The level of photography? Cheap? Expensive?
4.What was the reason for the sharp decline in FCF in 2004-2006? Was it due to heavily investing in the business and do you think the turnaround already happened in 2007?

I’ll start reading some reports and try to get a better picture.

]]> By: Jim http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-792 Jim Fri, 21 Nov 2008 21:14:06 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-792 I also want to share with you a calculation that has been around since 1968 called the Altman Z-Score. You may or may not have heard about it. I would imagine you have if you do M&A deals. This score is used extensively and is considered a 'standard' in determining whether a company will go bankrupt within a two year time period. It carries a 70% accuracy rating. If a company receives a score of 2.6 or higher, there is a 70% chance that the company will not go bankrupt. 1.1 - 2.6, a company is in the 'grey zone'. If a company's score is less than 1.1, there is a 70% chance that they will go bankrupt within 2 years. In the investing world, any tool that carries a 70% accuracy rating is a tool I'm going to use. Again, this has been around since 1968 and has been deemed as the 'standard' testing device used my accounting firms when determining an M&A deal. CPI Corp's Z-Score is 4.06. Having a Z-Score that high especially when they've never taken on so much debt is also another reason why this is a great investment opportunity in my opinion. Would love to hear your thoughts. I also want to share with you a calculation that has been around since 1968 called the Altman Z-Score. You may or may not have heard about it. I would imagine you have if you do M&A deals. This score is used extensively and is considered a ’standard’ in determining whether a company will go bankrupt within a two year time period. It carries a 70% accuracy rating. If a company receives a score of 2.6 or higher, there is a 70% chance that the company will not go bankrupt. 1.1 – 2.6, a company is in the ‘grey zone’. If a company’s score is less than 1.1, there is a 70% chance that they will go bankrupt within 2 years. In the investing world, any tool that carries a 70% accuracy rating is a tool I’m going to use. Again, this has been around since 1968 and has been deemed as the ’standard’ testing device used my accounting firms when determining an M&A deal. CPI Corp’s Z-Score is 4.06. Having a Z-Score that high especially when they’ve never taken on so much debt is also another reason why this is a great investment opportunity in my opinion. Would love to hear your thoughts.

]]> By: Jim http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-791 Jim Fri, 21 Nov 2008 20:45:03 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-791 Jae, thanks for your response on CPY. Couple things I want to pinpoint why I think your analysis is very incorrect. Of course I understand that you haven't researched the company thoroughly so I'm not holding anything against you :) But, here's why you should take a deep look. First the Dividend. My records go back to 1990. Up until Aug. 15th, 1989 they paid a dividend of .10 per quarter. From Nov. 20th, 1989 - Aug. 14th, 1990 they paid .12 per quarter. From Nov. 13th, 1990 - May 15th, 2003 they paid .14 per quarter. And from Aug. 14th, 2003 - Present they pay .16 per quarter. This company has been in many recessions and never faltered on paying their dividend. For over 28 years they payed a dividend. They've been in business with sears for over 75 years. They've been in business with Wal-Mart for over 10 years. Their debt has always been low except for this year which is the first year they've taken on significant debt. The reason is because they've upgraded all their studio's inside of every Wal-Mart and Sears to digital. Before they were Analog. Going Digital allows them to cut their costs in half. Their cost of revenue as well as their debt is going to be very low because of this upgrade in the coming years. Mark my words, their dividend is not going to decrease. There's always exceptions to the rule and this is one of those cases. About their business. You're correct, they don't own real estate. Every Wal-Mart photo center is owned and operated by CPI corp. Every Sears picture me studio is owned by CPI. Wal-Mart is expanding very big into China right now. CPI has a global position because their agreement with both Wal-Mart and Sears is to be in EVERY Wal-Mart and Sears around the world. So, When Wal-Mart expands, so does CPI except CPI doesn't have to pay for the building so there's no real estate debt to incur. My EPV is much more conservative than a FCF or DCF model, its one reason why I put more faith into it and I came up with $25.00 per share using the EPV model. That model tells me what the company is worth right now, today. Not in 5, 10, 15+ years from now. I bought more shares this morning and hope the stock goes lower so I can buy more. I honestly believe in my 10+ years of investing, this is the best opportunity I've seen. The Dividend is going to be their. Even though I never purchased this company based on their dividend, it is icing on the cake in my mind. Look forward to hearing more from you. Jae, thanks for your response on CPY. Couple things I want to pinpoint why I think your analysis is very incorrect. Of course I understand that you haven’t researched the company thoroughly so I’m not holding anything against you :) But, here’s why you should take a deep look. First the Dividend. My records go back to 1990. Up until Aug. 15th, 1989 they paid a dividend of .10 per quarter. From Nov. 20th, 1989 – Aug. 14th, 1990 they paid .12 per quarter. From Nov. 13th, 1990 – May 15th, 2003 they paid .14 per quarter. And from Aug. 14th, 2003 – Present they pay .16 per quarter. This company has been in many recessions and never faltered on paying their dividend. For over 28 years they payed a dividend. They’ve been in business with sears for over 75 years. They’ve been in business with Wal-Mart for over 10 years. Their debt has always been low except for this year which is the first year they’ve taken on significant debt. The reason is because they’ve upgraded all their studio’s inside of every Wal-Mart and Sears to digital. Before they were Analog. Going Digital allows them to cut their costs in half. Their cost of revenue as well as their debt is going to be very low because of this upgrade in the coming years. Mark my words, their dividend is not going to decrease. There’s always exceptions to the rule and this is one of those cases.

About their business. You’re correct, they don’t own real estate. Every Wal-Mart photo center is owned and operated by CPI corp. Every Sears picture me studio is owned by CPI. Wal-Mart is expanding very big into China right now. CPI has a global position because their agreement with both Wal-Mart and Sears is to be in EVERY Wal-Mart and Sears around the world. So, When Wal-Mart expands, so does CPI except CPI doesn’t have to pay for the building so there’s no real estate debt to incur. My EPV is much more conservative than a FCF or DCF model, its one reason why I put more faith into it and I came up with $25.00 per share using the EPV model. That model tells me what the company is worth right now, today. Not in 5, 10, 15+ years from now. I bought more shares this morning and hope the stock goes lower so I can buy more. I honestly believe in my 10+ years of investing, this is the best opportunity I’ve seen. The Dividend is going to be their. Even though I never purchased this company based on their dividend, it is icing on the cake in my mind. Look forward to hearing more from you.

]]> By: Jae Jun http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-787 Jae Jun Fri, 21 Nov 2008 07:59:05 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-787 @ Andrew Sorry I don't believe I got that email. I searched my inbox but nothing showed up. Can you send it to me again please? @ Andrew

Sorry I don’t believe I got that email. I searched my inbox but nothing showed up. Can you send it to me again please?

]]> By: Jae Jun http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-786 Jae Jun Fri, 21 Nov 2008 07:57:59 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-786 @ Jim I would stay away from this one. The first warning sign is actually that 42% yield. If what I learned from dividend investing is true, stay away from extremely high yielding stocks because it is bound to be cut. That's whats happening to many dividend yielding stocks. I see from Google that they only raised dividends once. It was always at 14c and then raised to 16c. Further warning signs. their dividend payment in 2008 was 4.1 million. Their net income was 3.6 million. They are giving out more dividends than they earn and they probably took on that extra 115 million in debt just to do so. Total debt is very high for such a small company. Other factors include not being able to increase FCF for the past 10 years, decreasing tangible shareholders equity over 10 years. The book value you quote includes debt. Total equity is really only 17million and they have 63 million in intangibles. I don't know whether CPY has their own real estate, but if they have agreements with Walmart and Sears, Im assuming they set up a small studio inside. My intrinsic value came out to $26 only based on a 5% growth in organic FCF growth but I doubt this would happen. Graham tells me its worth $9 and the NNWC is negative so if they were liquidated tomorrow, you'd be wiped out. For me, the risk is far to high compared to the return. I like VVTV because even if their business failed, they have assets to liquidate and sell off. No debt as well which makes it even better. However, with CPY, they don't really have much to offer for safety. @ Jim
I would stay away from this one. The first warning sign is actually that 42% yield. If what I learned from dividend investing is true, stay away from extremely high yielding stocks because it is bound to be cut. That’s whats happening to many dividend yielding stocks.

I see from Google that they only raised dividends once. It was always at 14c and then raised to 16c.

Further warning signs. their dividend payment in 2008 was 4.1 million. Their net income was 3.6 million. They are giving out more dividends than they earn and they probably took on that extra 115 million in debt just to do so.

Total debt is very high for such a small company.

Other factors include not being able to increase FCF for the past 10 years, decreasing tangible shareholders equity over 10 years.

The book value you quote includes debt. Total equity is really only 17million and they have 63 million in intangibles.

I don’t know whether CPY has their own real estate, but if they have agreements with Walmart and Sears, Im assuming they set up a small studio inside.

My intrinsic value came out to $26 only based on a 5% growth in organic FCF growth but I doubt this would happen. Graham tells me its worth $9 and the NNWC is negative so if they were liquidated tomorrow, you’d be wiped out.

For me, the risk is far to high compared to the return.

I like VVTV because even if their business failed, they have assets to liquidate and sell off. No debt as well which makes it even better.

However, with CPY, they don’t really have much to offer for safety.

]]> By: Andrew Knight http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-785 Andrew Knight Fri, 21 Nov 2008 05:31:15 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-785 Hi Jae, I'm emailing you in regards to an email I sent to you last month about a partnership, have you had a chance to think about it? If you have any questions or would more information, please advise me and we can go from there. Kind Regards, Andrew Knight Hi Jae,

I’m emailing you in regards to an email I sent to you last month about a partnership, have you had a chance to think about it?

If you have any questions or would more information, please advise me and we can go from there.

Kind Regards,
Andrew Knight

]]> By: Jim http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-783 Jim Fri, 21 Nov 2008 01:44:41 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-783 BTW, I'm the one who sent you the email on CPI Corp. I'd like to hear your analysis of it. Its dividend yield closed at 42.67% today. A 'catalyst' that is hard to ignore. I've got an intrinsic value of $25 on the company. Their book is $1.77 and their market price closed at $1.50 today. Their competitive advantage is due to their agreements with Wal-Mart and sears. A competitor entering their market is at an extreme disadvantage. They've paid a dividend for 28+ years (i've tracked them back to 1990 but they've been around much longer, 75+ years with sears). Their dividend has always increased over those 28+ years. The main catalyst to purchasing them NOW is that they just put out a press released on Nov. 11th, 2008 stating that they will pay the .16 per share quarterly dividend on Dec. 1st, 2008 to all who have purchased shares by Nov. 24th, 2008 (4 days away). That gives an investor to make a nice lump of change in the next two weeks. Again, the annual yield is 42.67% and their share price closed at $1.50 today. I can't find any other reason why this company is trading so cheaply other than current Macroeconomic condition and investor fear. Would love to hear your input on it. Incidentally, the well known value investor Arnold Van Den Berg from Century Management has been adding to his position in CPI since September of this year. Arnold is a well known Graham style investor. BTW, I’m the one who sent you the email on CPI Corp. I’d like to hear your analysis of it. Its dividend yield closed at 42.67% today. A ‘catalyst’ that is hard to ignore. I’ve got an intrinsic value of $25 on the company. Their book is $1.77 and their market price closed at $1.50 today. Their competitive advantage is due to their agreements with Wal-Mart and sears. A competitor entering their market is at an extreme disadvantage. They’ve paid a dividend for 28+ years (i’ve tracked them back to 1990 but they’ve been around much longer, 75+ years with sears). Their dividend has always increased over those 28+ years. The main catalyst to purchasing them NOW is that they just put out a press released on Nov. 11th, 2008 stating that they will pay the .16 per share quarterly dividend on Dec. 1st, 2008 to all who have purchased shares by Nov. 24th, 2008 (4 days away). That gives an investor to make a nice lump of change in the next two weeks. Again, the annual yield is 42.67% and their share price closed at $1.50 today. I can’t find any other reason why this company is trading so cheaply other than current Macroeconomic condition and investor fear. Would love to hear your input on it. Incidentally, the well known value investor Arnold Van Den Berg from Century Management has been adding to his position in CPI since September of this year. Arnold is a well known Graham style investor.

]]> By: Jim http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-782 Jim Fri, 21 Nov 2008 01:23:47 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-782 The book that talks extensively about it is called "Value Investing: From Graham to Buffett and Beyond". Wiely Press puts it out. I found a copy through amazon for around $10. Bruce Greenwald is the main author and Judd Kahn, Paul Sonkin, & Michael Van Beima are contributing authors. Its really a great read and until I read a copy, I used DCF exclusively. I hope I don't sound like I'm minimizing the effectiveness of DCF because I certainly don't intend to. The book that talks extensively about it is called “Value Investing: From Graham to Buffett and Beyond”. Wiely Press puts it out. I found a copy through amazon for around $10. Bruce Greenwald is the main author and Judd Kahn, Paul Sonkin, & Michael Van Beima are contributing authors. Its really a great read and until I read a copy, I used DCF exclusively. I hope I don’t sound like I’m minimizing the effectiveness of DCF because I certainly don’t intend to.

]]> By: Jae Jun http://www.oldschoolvalue.com/blog/valuation-methods/morningstar-old-school-intrinsic-value/comment-page-1/#comment-780 Jae Jun Fri, 21 Nov 2008 00:44:07 +0000 http://www.oldschoolvalue.com/blog/?p=194#comment-780 Very interesting. Take up as much space as you want because I'm learning something and I'm sure others will find it helpful as well. I'll have to take a deeper look into EPV and see how it works. Thanks Very interesting. Take up as much space as you want because I’m learning something and I’m sure others will find it helpful as well.

I’ll have to take a deeper look into EPV and see how it works.

Thanks

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