This looks like a winner to me. Zero long term debt 3 years running,
positive and increasing cash flows from operations, positive and increasing net income, sales. Good to excellent business ratios. In a top quartile (price strength) industry group. Beating consensus quarterly EPS by a handy margin for consecutive quarters. Haven't
found any capital expenditure, working capital, or discretionary spending numbers, so can't take the operating cash flow any further.
Two analysts follow--one strong buy, one hold. Consensus EPS for 1997 is $1.75; for fiscal year ended 12/96 its $1.47. Consensus growth rate for 97 is 19% (their industry group average is 27.9%). According to Zacks,Insiders only own .07%, which bothers me a little (but this conflicts with your 41% number). Chart said buy at just over 20, so I did. Since many analysts use PE/growth rate < 1 as a proxy for valuation, my target price is about 33 (not because I necessarily believe it would be overvalued above that point, but because an analyst rating downgrade could occur at that point, which could cause at least a short term pause or drop). If it shows strength above those levels, and the fundamentals continue to hold up, I'll likely buy more. So far, about the only thing I don't like about the stock are the recent wide spreads, and that the market makers won't allow sell stops anymore. Also, next EPS report date is 2/7.
D.H. |
