OVERVALUED STOCK - Correction
PCC Group, Inc. stock is currently trading at a 31 P/E multiple. Price/Earnings ratios for similar size competitors such as Atec Group, Inc (ATEC), Manchester Equipment Co. Inc. (MANCN) and Micros to Mainframes, Inc. are 20, 14 and 17, respectively. The stock of Tech Data Corp, the second largest publicly held company trades at 17 P/E.
Internet Web Site Fiasco
PCCG's stock overvaluation has been driven by several smoke and mirror press releases promoting its new 123CDC.com web site. However, the Company's second and third quarter 10-Q filings for the three months ended on March 30, 1999 and June 30, 1999, failed to disclose any activity related to its E-Commerce business, such as revenues or number of hits. Its 10-Q report for the nine months period ended on June 30, 1999, states that the Company's "retail Internet sales constituted less than __% of the Company's net sales." Yes, "__%".
Core Business Deterioration
(1) <Net income> decreased by 74% from $1.5 million for the nine months period ended on June 30, 1998 to $380,000 (excluding estimated expenses for its Internet business of $365,000) for the comparable 1999 period. Revenues decreased by 12% and 30% during the second and third quarters of fiscal 1999.
Correction Note To Posting #66:
(1) Delete <Net income>, insert <Operating income>. Sorry for the mistake. |
