[copake_ham]

I'm not so sure.

The analysts also pay attention to cash flow. Right now, Kodak's traditional operations do wonders for its cash flow picture - if for no other reason than these traditional operations result in a great deal of depreciation which is added on to the cash flow.

Cash flow is the main determinant in the cost of acquiring and servicing debt. When you restructure (which Kodak has been doing non-stop for years) - you tend to acquire lots of debt.

Kodak just let a big piece of recurring cash flow go in the form of their Health operation - and much of that is being used to reduce their debt. However, they will probably want to be reasonably sure that they will not need access to low-cost debt in the short-term if they surrender their film operations. Because this will have a pretty negative impact on cash flow and raise their borrowing costs.

On the other hand, you balance all that against what you are likely to fetch for the film operations. Right now, the only estimates I've seen peg its value 0.5 X its annual revenue given that the film market is moribund (at best) but profitable. So we are talking about $1.5 - 2.0 billion (thereabouts) and that number will only go down with time.

So the decision, I think, is pretty complicated. If Kodak's inkjets prove to be runaway hits and digital margins start to look much better - then maybe there's no need to acquire new debt and film's margins will start to look like a drag.

But that's all speculative on my part.

I have no speculation to offer. If you drill down into this article from today's NY Times biz section:

http://www.nytimes.com/2007/02/09/bu...ss&oref=slogin

You will find that five of the eight Street analysts who cover Kodak have a "Sell" recommendation. The other three are at a "Hold" position. None have a "Buy" recommendation.

What this means is that large institutional portfolio managers will be very wary of adding Kodak shares to their holdings. While it is true that you make big money on the Street by going against the herd - few lose their jobs while running with it.