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Subject:  Re: HD ranker Date:  1/7/2000  11:03 AM
Author:  geoffchase Number:  5098 of 8329

**warning this is my first ranking post--accuracy not guaranteed**

Anything free comes with no guarantee, right ?! ;^)

Good looking ranker tho I cant swear for the numbers. I do suspect that this is about as high as HD might get too. Why?? Well the flowie could get them 4-6 more points if they get it down under 1.5 but with very little ST debt that means they have to lower current assets which are probably tied up in A/R and Inventories - typical for merchant companies like HD.

The other place they lose big is margins (gross and net). Again they generate lots of cash, as you noted in your report, when things are going well, but, merchant retailer companies rarely, if ever, get the margins up to the top RM standards of 50% and 10-12% (gross and net). Dell is in a similar situation regarding margins.

Overall, I'd say they are a Merchant-King rather than a RM. Certainly seems, from this report, as if they may be starting to get the best of Loews.



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