Value Investing

Garcia Value Fund Performance For February 2008

The Garcia Value Fund underperformed the S&P 500 by less than 1%. Again, these numbers mean nothing as the fund is still relatively new. I will start paying attention once the fund is 3-5 years old.

Unfortunately, my biggest (and latest) holding is down 20% since I bought it. I have no plans in selling Office Depot. The company should be fine in 3-5 yrs. I would like to announce another addition (and eliminations) to the Garcia Value Fund, Wellcare Health Plans (WCG).

The stock caught my attention when it was mentioned by Bruce Burkowiz in a interview. The basic story behind this HMO is unique and is another case of investor reaction. The company’s shares plummeted after the FBI raided its offices for fraud. Since it was mentioned by Bruze Burkowitz I spent the weekend reading up and everything appears good. Below are some of the numbers:

Market Cap	1.95 Billion
P/E (ttm)	10
P/BV	2.93
Return on Eqity	32%
EBITDA	328 million
EV/EBITDA	1.542
Operating Cash Flow	602 million

The beauty about WellCare Health is it is expected to grow at a pace greater than 10%. unfortunately for me, I have no cash on hand and again will have to make some sacrifices. This time E-Trade and Wal-Mart are the victims. I am simply selling decent opportunities for a great opportunity.

No position in any companies mentioned.

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© 2008 Contrarian Value Investing.