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No. of Recommendations: 2
Hmm, I think you mean "far from over."

That is what I meant. :)

TST: This is The Street.com. Remember Jim Cramer. A media company. Not too long ago, it was long in the doghouse for not having files its quarterlies for an year and pending account restatement. They had issues with their purchasing of another company called promotions.com. They got delisting or a stern warning notice too. The stock traded at an all time low and then in the midst of such depressing scenario they declared dividend. I went by the gut feel that a person like Cramer who relies on reputation would not do something stupid and purchased. A quarter later the filing was completed. The account restatement had insignificant changes. For the last several quarters there have been regular filings and dividends which is a sizeable one. They trimmed their workforce, sold the loss making promotions.com and did other house cleaning. They did all of this while maintaining their debt free status and keeping their cash and investments intact.

MOH: Very low margin health care business primarily confined to 2-3 states and very low revenue growth in recent past but last quarter was good. Afterall the good old republicans are back! It stayed debt free and managed to amass a cash horde close to their mkt cap when they were trading near $18. That is when I purchased it. Since then it used some of that cash to make a small acquisition that was profitable overall for 2010.

I am not savvy like you to do a detailed analysis on ROE or ROIC like metrics while differentiating between debt and equity markets. But I have seen it happen almost everytime that a cash flow positive firm that is not loosing revenue is a good bargain when having >50% of mkt cap in cash and marketable investments.

Similarly, I have seen that firms selling at a historic low P/E that produce good cash flows and rising revenues tend to do well despite everything else. Remember our discussion on IART boards? You had explained to me how the firms was not making good use of capital and that was a good lesson to me but the company did quite well since the $33 sell. I finally sold it near $49 and it now sells above $50. No longer a low P/E. So while it may not have fit the bill of a long term potential for SA newsletter, I think it was a MUE like stock at $33 and not anymore at $50.

I do not know if excessive cash or historically low P/E along with some other caveats like non-negative revenue growth, staying cash flow +ve, debt free and long term stable business case helps in determining MUE for you. Probably not. But I thought I will just throw in such metrics.

Anurag
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