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This issue's assets for purchase consideration have been increasing in price and earnings lately and so have some possible short-term momentum factors in their favor. Nonetheless, their primary potential is for the long-term. They each appear to have an average safety rating. As a whole, they have low price-to-earnings (P/E) ratios. It is hoped that, in the next three-to-five years, their combined price appreciation could double that of the Standard and Poor's 500 or the Dow Jones Industrial Average.
| Asset | Fleming
Cos. | Group 1
Automotive | Hot Topic,
Inc. | PacifiCare
Health | Syncor
International |
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| Symbol | FLM | GPI | HOTT | PHSY | SCOR |
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| Recent Price | $26.25 | $30.01 | $26.60 | $17.55 | $28.09 |
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Price to
Earnings (P/E) | 11.4 | 12.0 | 19.7 | 6.8 | 17.4 |
|---|
| Industry | Food
Wholesalers | Retail
(Special Lines) | Retail
(Special Lines) | Medical
Services | Pharmacy
Services |
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Interestingly, our earlier recommended bargain stock, Fruit of the Loom (FTLAQ), one whose subsequently plummeting price shows the value of diversification, has been again in the news. Warren Buffett's Berkshire Hathaway (BRK.A; BRK.B) is purchasing the company's entire apparel business for just under one billion dollars. The deal is expected to be consummated in the first quarter of 2002.
Buffett said of the venture: "We agreed to buy Fruit of the Loom for two major reasons: the strength of the brand and the managerial talent of John Holland."
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