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Author: EBlakemore Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35357  
Subject: Re: Another alternative Date: 8/28/2000 8:47 AM
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Do you think Kmart is a good investment in light of all the troubles they have had? Will the new CEO pull them out of the ash can?

There's a good argument to be made in its favor (at least for the common). Read the thread on the "Security Analysis -- the book" board and you'll have the gist of my thinking and the pretty reasonable views of several others whose views I respect. There's something intangible that keeps me from buying them myself (and some of that may just be how overweight my portfolio is at the moment in retail issues)... but I could very well be missing a good turnaround here. I've taken at least one more store visit since that discussion, with an eye to scoping them out as an investment.

There's definite improvement in ambience, and I *might* actually shop there a bit more than I have in the past. But the taste of the past is strong, and I suspect that's an intangible that may weigh heavily on management's ability to transform the company.

All in all, my take from the discussion was that this was very likely an investment unlikely to lose significant value, if held long-term, but I can't say how strong the upside could be, and with what I see as overcapacity in retail, and Kmart in a sort of "not big enough/not small enough" bind against fresher horses I can't say there's *no* risk of further decline or even eventual insolvency. Someone else might well reach a different conclusion than I have, after looking at much the same thing. A strong showing by the new management could well turn things around for them, and at least in the physical stores I've seen, there are signs the new management is changing things for the better.

Read the discussion, it covers a lot of bases and isn't limited to my subjective opinion of the company.

A good place to start might be Woodstove's valuation notes at:

http://boards.fool.com/Message.asp?mid=13035285

That puts you more or less in the middle of the discussion, trace back a week or two from there to get the background and development of the discussion.
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