Buying VALU - Value Line, Inc.

Does Value Line Do?

Value Line Inc. (VALU) produces periodical investment publications, licenses Value Line trademarks & proprietary ranking system information to third parties, and provides investment management services to the Value Line funds and accounts.

Why Are We Buying Value Line?

Value Line is a fundamentally sound company that has taken a beating due to the recent stress on the financial sector. Since Value Line is a service provider it carries no inventory. It has no debt on its books and is currently priced at attractive levels compared to its past performance. In addition, it pays a good dividend, and provides analytical investment knowledge that should find higher demand during these uncertain times. Historically, their service is spoken of highly and the company is largely owned by insiders.

Why Might You Hold off on Value Line?

The market capitalization of Value Line is small (about a quarter of $1 billion), and they are losing money (negative profit margin). During a time when there is so much pressure on the financial industry there is always the chance that the little players will get gobbled up in the mess, and not necessarily in a good way. In other words, if they continue to lose money and fail to cut costs, they may well run out of cash necessary to continue operating. You'll note that their annual revenue has not increased over the past 10 years. It's pretty much stayed even, with a dip during the recession.

How Informed Is Your Investment Decision?

We're buying Value Line, as you'll see if you examine our caps portfolio. But does that mean you should? Only if you're comfortable and feel that you know enough to make an informed investment decision. Take your time and do your research before diving in (or out).