ECGOF: Anyone following this company? Message Board

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Gold/Mining/Energy : ECGOF: Anyone following this company?

ECX 1.720

+3.6%

Dec 31 3:59 PM EST

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To: Michael Anthony who wrote (235)	4/4/1997 7:42:00 AM
From: david james	of 269

Michael, - You do have some odd notions. First - 'internal' growth is around 30% - that does not include the Chem earnings. McGinnis has stated that they will make $1.20 (50% growth on earnings). That will go higher if they obtain new contracts or acquisitions. If they get the Brown and Root contract, it could easily add 15 to 20 cents to that $1.20. Another contract or good acquistion and that will go higher. - Second, one worries about slowing growth only when the P/E is high. For example, MSFT has a P/E around 45. If they were to slow in their growth to around 30%, then then P/E and the stock price could drop 50%. If ECGOF had a P/E of 80 right now conforming to the 100% growth (e.g., a price of $64/share), then a drop of growth to 50% could lead to a drop of the P/E of from 80 down to 40 or so - a price of 40*1.20 or $48/share. I would be happy with a P/E of 'only' 40 with this stock. - Check First Call. The average growth of companies in this industry is 11%, while the average P/E of the industry is 19. It seems rather silly to conclude that because their growth is slowing to 'only' 50% (five times the average) then they don't deserve even the average P/E of the industry. - Remember that a P/E of only 20 and earnings of $1.20 would be a share price of $24. - I talked briefly to Investor Relations today. Annual report will be mailed out in next couple days. -I talked very briefly to an analyst at MH Meyerson (not to be confused with HJ Meyers). They are still covering American Eco but looking forward to the Annual Report before considering an update of their previous report completed in September. I plan on calling back in a week or so once the annual report is in their hands. Sounded like they were listening carefully to the teleconference as well. The old report is at mhmeyerson.com The MSNBC interview with McGinnis is available via Real Audio at msnbc.nasdaq.com David

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