Why Invest in a Winery? Certainly Not to Make Money.

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What's a quick way not to make a fast buck? Invest in a winery. Sure,

Mondavi

(MOND)

had its brief run, and

Beringer

(BERW)

has been a winner since last year's IPO. But for the most part, "Investing in a winery stock should be a lifestyle investment," says Lew Perdue, who publishes

Wine Investment News

(

www.wineinvestmentnews.com).

Perdue is setting himself up as a wine-investment watchdog, scanning the

SEC

filings of all 21 publicly (or soon-to-be) traded wineries for signs of trouble. He was credited

here last week for spotting a buried statement in an 8-K filed by

Seagram's

(VO) - Get Report

that said it may, as has been speculated, sell its wine and spirits business. "Nobody's watching this stuff," Perdue says. "It's just not cost-effective for anybody to follow it." One reason is that the entire wine industry, lock, stock and barrels, has revenues of $18 billion. That's one-third the size of

Hewlett-Packard

(HWP)

.

That's not to say you can't make "reasonable gains" from investing in wine stocks, but don't expect Napa Valley, by any investment yardstick, to be anything like Silicon Valley. That's why, at the bottom of Perdue's listing of financial ratios, you'll find the Perq (as in perquisite) ratio. The highest belongs to

Chalone

(CHLN)

, whose discounts, parties and winery tours make investors feel like members of a special club -- enough to compensate for a stock that has traded in a very narrow range for years.

One winery to watch:

Golden State Vinter

, which is in the process of going public. " If they maintain their edge," Perdue says, "they could be the sleeper over the next couple of years." He's impressed by the company's ability to make good, inexpensive wine.

On the other hand, he gives the equivalent of a skull and crossbones to

Andretti Wine Group

, of Mario fame. This small winery trades on the OTC bulletin board, but has filed to offer more stock and jump to Nasdaq. Retired racecar driver

Mario Andretti

serves as vice chairman and former

Kmart

(KM)

Chairman, President and CEO Joe Antonini is chairman. One big warning, according to the company's prospectus: possible securities law violations by previous management concerning $1.36 million in stock sales.

With an auspicious start like that, you can't help to wonder whether it will ever make it to the finish line.

Short Positions

Microchiped

: An item that ran on the site roughly half of Thursday wasn't up to this column's standards. It said that

Microchip's

(MCHP) - Get Report

receivables had stretched out 120 days. That should've said inventories, which is considered high by chip-making standards. Receivables were only around 50 days -- fairly constant (though, according to some skeptics, still too high for a company with such high inventories).

The item also suggested Microchip may have stuffed merchandise with its distributors. However, according to Microchip's stated revenue recognition policy, sales are generally recorded only after they're shipped by the distributor to the end customer customers.

Those issues aside, expect to see a classic bull/bear struggle over the company. CEO Steve Sanghi defends Microchip's high inventories as necessary for its products, which are programmed by the end customer. "We keep inventory on the shelf, and when the customer orders the product, we can ship it the same day." He also attributes the high inventories to Microchip's operation of its own fab. "Our inventory starts when we start building a wafer in our fab."

Sanghi adds that while most of the industry is posting losses, "We announced a 22% rise in pretax profits ... because of the types of products we build ... we are very much the exception, but a good exception."

Time will tell.

Hoping not to be seen (winners of this week's Ostrich Award):

Halsey Drug

(HDG) - Get Report

, which announced three hours after the market closed on Thursday -- the Thursday before July 4 -- that it had been sued for $20 million over the development and sale of a pharmaceutical product. So much for the stock breaking 3 anytime soon; it closed Thursday at 2 7/16.

Meanwhile, late on the same day,

Iomed

(IOX)

disclosed that

Novartis Pharmaceuticals Corp.

did not renew its collaborative research and development agreement with the company beyond its scheduled Dec. 31, 1998, expiration date. Considering that Iomed went public in April at 7 1/2, and closed Thursday at 5, it's understandable why it might hope nobody notices. Not a chance.

Herb Greenberg writes daily for TheStreet.com

. In keeping with the editorial policy of

TSC

, he does not own or short individual stocks. He also does not invest in hedge funds or any other private investment partnership. He welcomes your feedback at herb@thestreet.com. Greenberg also writes the monthly "Against the Grain" column for

Fortune.