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from Outstanding Investor Digest's December 31, 1996 Edition

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CENTURY MANAGEMENT'S
ARNOLD VAN DEN BERG

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OID: I understand that you're actually finding some compelling bargains in this market?
Arnold Van Den Berg: Absolutely. For example, Moore Products [MORP/Nasdaq] is a classic value play today. Moore Products produces metrology equipment - that is, fairly sophisticated measurement equipment - for companies that need to measure and control the pressure, flow and/or temperature of fluids. Their customers are companies in industries as diverse as chemicals, oil and gas, medical, pharmaceuticals, textiles, food and beverage, utility, agriculture and pulp and paper - you name it.

OID: Why do you say that it's a classic value play?
Van Den Berg: Well, its stock is around $19. It has no debt. And the values are absolutely all over the place. It has net working capital of $10.82 per share. It has a LIFO reserve after tax of $2.50 per share. And its pension plan is overfunded by $9.50 per share after tax. So that's nearly $23 per share of liquidation value right there.

[Editor's note: Moore's 1995 annual report states that the current cost of domestic inventories exceeded the LIFO (last-in, first-out) value by $9.8 million at 12/31/95.]

OID: Which doesn't sound all bad for a $19 stock.
Van Den Berg: And it gets even better. They also own about 130 acres of excess real estate. And we've talked to real estate people in Spring House, Pennsylvania, who tell us that land is selling for $100,000 per acre right down the street. But rather than use that $100,000 per acre figure - which would imply a value of $13 million - let's just say it's worth $10 million.

OID: We must not have explained the ground rules. You round up...
Van Den Berg: And that $10 million divided by Moore's 2.6-odd million shares outstanding would add another $2.50 per share after tax. That would bring their adjusted liquidating value to more than $25. Meanwhile, their stock's at $19. So you can buy Moore today at a discount of about 25% from its liquidation value.

OID: It sounds like the values are all over the place, all right.
Van Den Berg: And if you add their $9.50 of overfunded pension after tax, their $2.50 of LIFO reserve after tax and their $2.50 of real estate after tax to their current book value of approximately $20.70, you can see that their adjusted book value is north of $35.
So today's price is over 45% off adjusted book. And Moore doesn't have any intangibles on their balance sheet. So that $35 adjusted book is solid.

OID: That sounds like a classic value play, all right.

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