Here are my picks for January 1999.
CNGR,VGCP,CHS
I believe all have the capacity to make big gains short and long term.
1)CNGR- Crown Group- Current Price 1-1-98 $5.69
Buyout firm on a roll. 1999 revenues should exceed $150 million. Profits for this year ending in June should be .55 per share or better on on operating basis and at least $1.50 per share including one gain from Inktomi shares. Operating PE of about 10. Next year to be much better as acquisitions and current and pending operations mature.
Also, Company still holds 122,222 in Inktomi shares. Currently worth about $16 million, entirely profit. These shares can be sold on the open market beginning in February. Company sold 100,000 shares in private transactions earlier this year and made $11 million profit.
Major events on the way in January- Expansion of PAACO into lucrative Houston market, Opening of first extended stay hotel, research report to be released, road show to begin. Look for the price to rise significantly in January.
2) VGCP- Viking Capital Current Price 1-1-98 .70
Company has spent the last year developing proprietary software for insurance and related industries. This first in the industry software will run on their private network and provide interactive services for policy holders and provide substantial cost savings for the administrator.
Viking Plans to purchase 6 insurance companies within the next 6 months with managed assets totaling $1.5 billion. These operations will be put onto their private network and will utilize their software to maximize profits and streamline operations.
Viking will also begin selling their services, software and network usage in January of 1999.
Viking just obtained $2.5 million in financing for operations. They should finalize and announce a $250 million line of credit to facilitate the above acquisitions in January of 1999.
Upcoming events- Look for a huge jump in the stock price as the acquisition capital is announced. Also, look for several other key announcements in January. Internet aspect of the company could really add an explosive element to the stock.
3) CHS- Bernard Chaus Inc. Current Price 1-1-98 $2.43
Company designs and sells women's clothing. 1997 restructuring cleaned up balance sheet, provided needed capital and reduced debt. After several years of declining sales and money losing operations, the company is now growing and has sustained profitability.
Their clothes are flying off the racks. Their lastest offerings have been the best selling lines in years.
Company expects to report .50 per share in operating profits in the year ending in June 1999. At current levels that creates a PE of 5. Next year should be even better as unprofitable license deals have been shed.
Upcoming events- Company just hired a PR firm, website to open in January, unconfirmed rumors of plans to begin selling on-line, strong earnings to be released in early February, public offering to come to increase the float to make the stock more favorable to institutional investors, end of tax loss selling.
Other stocks to watch in 1999- GMTI, SEEQ, BOCI
RCJIII |
