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Hi Doc,

I would love to jump into FAST at the right price, which right now would be in the high 20’s or so, assuming the fundies are still in good shape. So my conclusion on FAST is that the fine folks at M* are probably right on the fundies, and they may even be right on the price analysis, but it’s too rich for my blood at these prices. There are better candidates elsewhere.

My quick rule of thumb usually is if the stock doesn't initially yield the equivalent to a one-year CD, or ten-year treasury, take your pick — currently a yield of about 5% which translates to a p/e ratio of about 19, then I have to find a very, very good reason to buy at a richer valuation (next I'll look at price to cash flow and see what the spread is), I already alluded to this. Where I'm going here is that with FAST, a p/e of 19 would translate to a share price of $25.00 and as that's a trailing p/e I would start to get very interested at around $28.00. This coincidentally is the buy price you have arrived at by other means, so maybe our roads taken are different but the destination the same, this time at least.

Talking about issues with Morningstar's valuations, currently Harley Davidson has a p/e of just over 13, but would require a 10% share price drop to meet their Consider Buying price. There's a current thread on HOG and its potential as good buy at these prices on the BMW board — which I'm sure you're already aware of. Feel free to chime in if you feel inclined; the more the merrier.

Thanks,
kelbon
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