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Cooper Tire & Rubber Co. Message Board

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  • DONEDEALER DONEDEALER Dec 7, 1999 7:59 PM Flag

    52 week lows

    I stand by my analyses which calls for a low
    at
    about 110% of book value and a high in 2000 at
    about
    200% of book value. Book value this year
    is about
    12.70 for a low at 110% of about
    $14. Next year with
    book value of 14.15 the
    indicated low is about
    15.50 and the high is
    about $28.

    Regarding
    the acquisition of SPD I believe a
    case could be
    made that as much as $2 per share
    was paid in
    excess of a mid-point value for
    SPD and, therefore my
    numbers could be off
    by as much as $2. But remember,
    my 110% of
    book value is a knock down number
    last
    seen in 1988 followed by lows of 150% of
    book
    value.

    Assuming, as I do, that CTB will go forward
    earning 14%+
    on this book value, this beats
    bonds and most
    investments. That is, if we buy
    and sell at about book
    value we earn 14% on
    our money. If book value
    doubles then are
    return is enhanced greatly depending
    on the
    time frame. The old adage, "you can
    pay
    me now or pay me later".

    I see very little
    downside below $14 if EPS
    is $2+ and
    growing.

    Regarding the debt level this could be a plus
    based on
    the leverage. SPD appeared to be headed for sustained
    EPS of over $2 per share.
    Ignoring goodwill
    amortization, this should
    cover the interest on the $36.50
    acquisition
    price. Assume 8% interest = 4.8% after-tax
    or $1.75
    on $36.50. This gives cash flow
    accretion of $.25
    per SPD share or $4,250,000
    for CBT. This is about
    .05 per CTB share.

    For those you don't like
    CTB at a projected
    6 PE ratio I suggest that they
    forget about
    investing altogether.

 
CTB
28.70-0.28(-0.97%)Sep 30 4:02 PMEDT

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