SHCC News. Re: Stockreporter.de
9/16/99 - Stockreporter.de Announces Investment Opinion on Saratoga International Holdings Corp.
NEW YORK, Sep 16, 1999 (BUSINESS WIRE) --
Stockreporter.de Begins Coverage of Saratoga International Holdings
Corp. (SHCC) With a Strong Buy Recommendation and a Conservative
Price Target of $2.1 Per Share
Saratoga International Holdings Corp. (OTC BB:SHCC ) 1/2www.SaratogaHoldings.com3/4 today received a strong buy recommendation from the Stockreporter.de, a leading European financial Internet publication at www.stockreporter.de. The Stockreporter.de specializes in the coverage of micro caps and undervalued OTC and BB companies. Stockreporter.de initiated coverage with a conservative target price of $2 per share for the year 2000.
"Industry analysts forecast that in two to three years telephony over the Internet will be the medium of choice for the movement of voice and data. At a fraction of today's prices Internet phone usage is expected to increase dramatically. In this context, Saratoga International Holdings Corp. is offering the innovative "Talk is Cheap Card" available at www.TalkisCheapCard.com. This card will save customers substantial dollars over current long distance services", said Dennis C. Hass from Stockreporter.de. Furthermore, "In addition to the marketing efforts and support of Teleglobe Communications Corp, as its long distance carrier, Saratoga will have enormous growth potential as a leader in the prepaid arena. I am convinced that in the years to come SHCC will develop into a runner much like NTOP (Net to Phone) is now," commented Hass.
Both the cooperative marketing Agreement with Internet communications leader Media Ring, (www.MediaRing.com) and the acquisition of the Telecom division, will make SHCC a major player in the Internet telephony industry and encouraged Stockreporter.de to regard SHCC as a first class investment opportunity and as one of the most promising companies currently traded in the OTC and BB segment.
Stockreporter.de's analytical report on Saratoga included the following information:
COMPANY OVERVIEW
Saratoga International Holdings Corp., formerly Western Oil & Tire Distributors, Inc. (WOTD), became active in 1997. In July 1998, the Company completed a merger with Knightsbridge Corporation and became publicly traded on the OTC Bulletin Board (now trading as SHCC).
Saratoga International Holdings Corporation is a vertical growth Internet and telecommunications facilitator specializing in penetrating low and mid-level market sectors often overlooked by major service providers. Saratoga endeavors to compliment primary communications services by developing fill-gap relationships with major Internet and telecommunications companies. By providing solutions to unmet market needs, Saratoga can enhance the overall level of service offered by their business partners.
The Company's growth plan is based on acquiring businesses and technologies with strong management and corporate infrastructure to rapidly penetrate niche markets and effectively absorb rapid future growth through the Company's business acquisition and consolidation plan ("Roll-Up Plan").
E-Commerce Focus:
The Company's current focus is principally targeted at business opportunities stemming from the explosive growth in e-commerce trade with a strategy of penetrating low and mid-level market sectors often overlooked by major service providers. SHCC, through its wholly owned subsidiary, Saratoga Telecom Corp., has positioned itself as an Internet telecommunications facilitator by the acquisition of the Telecom division of Internet Interview Inc. Aventura, Florida. The marketing Strategy is based on selling prepaid long distance pin numbers via Internet on a worldwide scale. This system removes two of the most common problems associated with the sale of prepaid calling cards, the manufacture and security of the physical card and its distribution.
Internet Telecommunications:
Under Saratoga Telecom's Marketing Strategy, the company has developed a unique method of retailing prepaid long distance via the Internet. Such marketing strategy is based on selling pin numbers that provide customers with access to units of long distance usage. Saratoga's "Talk is Cheap Card" prepaid pin numbers are sold over the Internet (www.TalkisCheapCard.com). The pin number is super-imposed over an online card that can be printed out and kept in the users purse or wallet. By making prepaid long distance available to second and third world countries over the Internet, Saratoga is positioning itself to capture a significant share of the prepaid long distance market without the prohibitive costs of traditional prepaid retailing such as card production, card security and distribution.
Strategic Alliance:
The Company has an agreement with Teleglobe Communications Corp. as the long distance carrier providing international telephone service originating domestically. Teleglobe Communications Corp. is a subsidiary of Teleglobe Inc., (NYSE:TGO ), a major provider of international telecommunications services.
The Company's goal is to establish itself as a worldwide reseller of Internet-based long distance service. SHCC is also pursuing negotiations with major Internet voice and video software developers to bring fingertip "look and listen" technology to daily Internet communications. The Company plans to continue its efforts to compliment primary communications services by strategic alliances with major Internet and telecommunications companies to provide solutions developed by SHCC's management team to unmet market needs.
BUSINESS GOALS
Founders of Saratoga International Holdings Corp. ("SHCC") are applying their extensive financial and executive management experience and skills to establish a high-revenue profitable company based on growth by acquisition of existing businesses and consolidation (Roll-up Plan).
The concept of business consolidation and roll-ups is currently popular in the capital markets and investment capital is available for the right projects. The Company's growth goals are based on the following business principles:
1) Businesses targeted for acquisition must be clearly
understandable and must have industry market appeal to
investors and the capital markets.
2) Industries selected must have rapid growth potential under
the roll-up strategy.
3) Companies targeted for acquisition must have a strong
management and corporate infrastructure base conducive to
efficiently and effectively absorbing rapid future growth
through the Company's merger and acquisition plan.
4) SHCC will initially serve as the parent company to the
businesses acquired. However, the merger and acquisitions
transactions shall be structured to allow for distribution of
ownership of industry segments to the shareholders when
deemed appropriate (
e.g. for financing, management or other business purposes).
GROWTH STRATEGIES
The Company's initial growth strategy is based on acquiring businesses in the early operating stage or those businesses with proven operating results seeking to expand beyond their present level of operations. Under a recent corporate restructuring, the Company redirected its Roll-up plan to include businesses with e-commerce trade, technology and services. The Company recently announced the acquisition of an Internet telecom business based in Florida.
The Company is currently evaluating several other e-commerce business opportunities presented to it for possible acquisition.
SHCC plans to continue to explore the possibility of acquiring businesses with product sales and distribution marketed commercially including e-commerce and other industry sectors
MANAGEMENT
The founders of SHCC have over 40 years of senior level management experience in financing and general management of businesses. Such experience includes public offerings for emerging companies, development of capital for expanding enterprises (foreign and domestic), business turnarounds, mergers and acquisitions, corporate valuations, foreign capital management, reverse merger formations, product and service marketing, operations management, professional accounting, capital formation and corporate finance planning.
The Company plans to supplement the skills of the founders by adding industry specific management team members experienced in the industries selected for business growth. The Company's early targeted acquisitions are expected to fill this need.
SUMMARY OF BUSINESS EXPERIENCE OF DIRECTORS AND OFFICERS
Patrick F. Charles, Chairman, President and CEO
Patrick Charles business experience of over thirty years includes substantial involvement in public offerings for emerging companies and the development of capital for expanding enterprises. His background also includes operations management with several companies including national director of legislative consulting services for Price Waterhouse Coopers, a "big five" international accounting firm. He serves on the board of directors or the board of advisors of several corporations. Mr. Charles holds a Bachelor of Sciences degree, in marketing, from Seattle University and an MBA from the University of Arizona.
Tom Morsey, President and Chief Operating Officer, Saratoga Telecom Corp. (a wholly owned subsidiary of SHCC) and Director of SHCC
As the former President of Internet Interview Inc. Tom Morsey has developed an innovative marketing strategy that is based on selling prepaid long distance pin numbers via the Internet on a worldwide scale. He has a wealth of experience in the Telecom business and has been able to negotiate favorable contracts with various LD carriers.
Terrence K. Picken, Director, Executive Vice-President and COO of the parent company, SHCC
The business experience of Terrence Picken of over forty years in Canada and the USA includes twenty-five years in "big five" international professional accounting, (CA and CPA), ten years of entrepreneurship in commercial real estate development and private industry and five years in private business advisor consulting. He was a general partner with Price Waterhouse Coopers, a major international accounting firm. Mr. Picken serves on the board of several companies. He holds a Chartered Accountant degree from the University of Manitoba.
Samuel H. Eisenberg, Director
Samuel Eisenberg is a Senior Vice-President of Portfolio Investment Strategies Corporation based in New York, which specializes in private investment banking. Sam has extensive experience in capital formation and corporate finance planning.
Harold P. Capozzi, Director
Harold Capozzi has been a director of the Company, formerly known as Knightsbridge Corporation, since February 20, 1997, and was the CEO & President/Chairman of the Board from June 1997 to July 1998. Mr. Capozzi is a prominent member of British Columbia's business community. He has wide ranging business experience in the food and beverage industry and high technology sector. He currently sits on the Board of a number of companies, including PLC Systems, Inc. (Amex) and Richland Mines, Inc.
STATUS OF BUSINESS GROWTH PLAN
SHCC, through its wholly owned subsidiary, Saratoga Telecom Corp., in June 1999, acquired the Internet telecom division of a company based in Aventura, Florida.
The Company's marketing strategy is based on selling prepaid long distance via the internet at great savings to customers in countries who call out of their area to the U.S. and to other areas across the globe, (over $7 billion annual revenue), and who are currently paying relatively high tariffs imposed by the country's government regulated service providers.
The Company's marketing strategy has been set into motion establishing a network of "Web Site" agents directing potential customers back to Saratoga Telecom's (Talk Cheap) prepaid long distance pin number Web Site. The initial target markets are seven countries including Barbados, Brazil, Chile, Colombia, the Dominican Republic, Mexico and Venezuela. Once the Company has validated the revenue potential in the initial countries targeted, it plans to rapidly expand the "Web Site" sales agent network to the other countries served by, Teleglobe Communications Corp., the Company's long-distance service provider.
The services of Tom Morsey were contracted in conjunction with the Internet telecom acquisition. Mr. Morsey, who was appointed President and Chief Operating Officer of the Company's telecom division, has substantial experience in the telecom industry. The Internet offers a multitude of commercial venture opportunities with relatively low cost entry and substantial upside potential. The Company's current growth efforts are principally targeted at opportunities presented by the e-commerce industry.
PRODUCTS AND SERVICES
TalkisCheapCard Saratoga distributes MediaRing's Internet voice communications software packages via SHCC's pre-paid calling card Web site located at talkischeapcard.com. MediaRing's fully functioning software downloads will be free of charge to visitors of the "TalkisCheapCard" site and will allow users to take advantage of MediaRing's outstanding PC-to-PC and PC-to-phone voice features.
Saratoga is privileged to partner with MediaRing to distribute the following proprietary MediaRing products over SHCC's Web site:
- MediaRing Talk(TM): Next Generation Internet voice communication
software that lets users make FREE long distance and
international calls between PC's.
- MediaRing ValueFone(TM): Allows users to make worldwide long
distance calls from a PC to any regular telephone anywhere in the
world at a fraction of the cost of regular long-distance or
international telephone calls.
As part of the Agreement, SHCC is being allowed to "I.D." Internet users who download MediaRing's products from the "TalkisCheapCard" site, and participate in revenues generated by use of the toll features available with MediaRing's software.
The "TalkisCheapCard", is sold over the Internet and has the pin number super-imposed over an on-line card. The card can then be printed out and kept in the buyer's purse or wallet. It will provide customers the convenience of making international calls from almost any phone anywhere at competitive rates.
SHCC has recently completed upgrades to its server and transmission infrastructure in anticipation of the Company's Internet product. These upgrades will accommodate the expected rapid growth in pre-paid revenues resulting from SHCC's aggressive entry into the domestic and foreign pre-paid long distance markets.
According to Tom Morsey, President of Saratoga Telecom, SHCC is paving the way for upcoming Internet telephony opportunities through partnerships with industry leaders such as MediaRing. Voice and video telephone calls over the Internet will soon be commonplace. The company is aggressively aligning itself with emerging technology developers to assist them in the marketing and distribution of tomorrow's communications products.
Saratoga Telecom views the MediaRing Agreement as an opportunity to be the 'first vendor' of MediaRing's technology to outlying areas such as Central and South America. By offering phone-to-phone, PC-to-phone and PC-to-PC communications access, SHCC seeks to establish itself as a brand name affordable source for personal and business communications needs in overpriced second and third world markets.
MediaRing Inc. (formerly Mediacom Technologies) offers next-generation Internet Voice Communication solutions for the Net generation. Founded in 1993, MediaRing holds several patents in electronic transparency, real-time application sharing, file transfer and electronic design, digital signal processor programming and implementations of various communications protocols such as ISDN and TCP/IP.
MediaRing is recognized throughout the world as a leader in its field. People in more than 120 countries are using the MediaRing Talk software Additionally, through its "TalkisCheapCard" Program (http://www.talkischeapcard.com), SHCC seeks to establish itself as a worldwide reseller of Internet-based long distance service. By making economical pre-paid long-distance available to second and third world countries directly over the Internet, SHCC positions itself to capture a significant share of the pre-paid long distance market without the prohibitive costs of traditional pre-paid retailing such as card production and distribution.
MARKETING STRATEGY
Saratoga Telecom Corp. signed an agreement with Teleglobe Communications Corporation, (NYSE:TGO ) enabling Saratoga to market and sell competitively-priced prepaid "virtual calling cards" over the Internet. Through the agreement, Teleglobe is providing Saratoga Telecom with the PINs (Personal Identification Numbers) or access codes required for customers to place calls. All international calls will be carried over Teleglobe's GlobeSystem network, one of the largest international telecommunications networks in the world.
The TalkisCheapCard will be sold online through Saratoga Telecom's Web site at talkischeapcard.com and will enable customers to place long distance calls from 94 countries worldwide. Saratoga Telecom has developed a unique method of retailing prepaid long distance via the Internet by selling to online customers PINs that provide access to units of long distance usage. Upon purchasing a TalkisCheapCard online via credit card, a "virtual calling card" will appear on the customer's computer monitor, complete with a PIN super-imposed over the on-line card. The card, priced in allotments ranging from US$20 to $300, can then be printed out and kept in the buyer's purse or wallet.
Tom Morsey, president of Saratoga Telecom, commented, "This agreement with Teleglobe furthers our plan to offer incoming, as well as outgoing long distance services to international customers living in the United States and abroad. As we unveil our competitive calling plans, our target market will immediately see the cost benefits of purchasing our virtual calling cards online."
Morsey concluded saying, "We are in the process of committing to a global Internet marketing campaign to brand the Saratoga Telecom and TalkisCheapCard names to international pre-paid buyers. We are definitely positioning ourselves to succeed in the domestic and international pre-paid arena."
Teleglobe's prepaid card service is unique in that it allows telecommunications carriers and large corporations to deliver a global calling service completely branded in their own name. The prepaid cards not only carry the brand of the carrier, but when callers use the card they hear custom-branded messages identifying the network with the retailer's name - a capability other carriers do not offer.
"Teleglobe's prepaid card service is another example of our ability to create customized products and services for our customers," said John Cahill, president, Teleglobe USA Inc. "Whether a customer needs global connectivity, PINs or a full turn-key calling solution, Teleglobe has a proven track record in creating global services that help our customers remain competitive."
Teleglobe's sizeable portfolio of global telecommunications services also includes domestic and international voice services, Internet access, domestic and international private lines, Asynchronous Transfer Mode (ATM) services, international toll-free services and postpaid calling cards.
About Teleglobe Teleglobe Inc. (NYSE:TGO ) (TSE:TGO ) (ME:TGO ) is a recognized leader in global telecommunications. Through its subsidiary Teleglobe Communications Corporation, the company develops and supplies global connectivity services to carriers, Internet service providers, business customers and content providers worldwide. Teleglobe also caters to an expanding international consumer customer base. According to TeleGeography, the company is the fourth-ranked long distance provider in the United States and, according to a recent KMI Corporation study, the third largest owner of undersea fiber optic cable systems. Teleglobe has a 50% interest in ORBCOMM, the world's first commercial low-earth-orbit, satellite-based, data communications system. Additional information is available at teleglobe.com.
FINANCIAL PROJECTIONS
The following financial projections estimated by Stockreporter are just based on revenues from selling "TalkisCheapCards" (no other sources of revenue are included). Therefore, Stockreporter.de considers the following estimates as very conservative. According to the management of Saratoga International Holdings Inc., in the next years the company will be able to sell "TalkisCheapCards" in 95 countries. For the year 2000 Stockreporter.de expects that SHCC will be able to sell "TalkisCheapCards" in 30 countries which is very realistic.
We consider the following revenue projections to be very conservative and achievable:
Revenues Projection:
Year 2000: $11,700,000
Year 2001: $30,000,000
Year 2002: $60,000,000
Earnings per share:
Year 2000: $0.07
Year 2001: $0.18
Year 2002: $0.36
Share price target:
Year 2000: $2.10
Year 2001: $5.40
Year 2002: $11.00
EVALUATION AND OUTLOOK
For the year 2000 we expect that SHCC will be able to sell "TalkisCheapCards" in at least 30 countries. Following a revenue estimate of $11,700,000, we conservatively expect $0.07 earnings per share for the year 2000. Therefore, we set our share price target at $2.1 based on a conservatively PE of 30. This forecast is more than justified based on SHCC's tremendous growth potential.
Furthermore, in view of the amazing growth potential of SHCC and the tremendous earnings per share estimates (e.g. $0.27 for the year 2001) even much higher share price dimensions seem to be clearly justified.
For the year 2001, we expect that SHCC will be selling "TalkisCheapCards" in at least 45 countries. This is a conservative estimate since the Company plans on selling "TalkisCheapCards" in 95 countries. Following a revenue estimate of $30,000,000 we conservatively expect $0.15 earnings per share for the year 2001, not including other sources of revenue. Therefore, we set our share price target at $5.40.
For the year 2002, we expect that the number of countries in which "TalkisCheapCards" will be sold will increase to a minimum of 60 countries. Following these calculations and a revenue estimate of $60, 000,000, we expect $0.36 earnings per share and we set our share price target at $11.0. Furthermore, in view of the amazing growth potential of SHCC and according to the fact that no other sources of revenue were included in our projections, even much higher share price dimensions are clearly justified.
We would like to also mention some additional and very important aspects: The management of the Company is currently evaluating the option of applying for a listing at a major stock exchange, e.g. NASDAQ or American Stock Exchange (AMEX). So in particular, this forthcoming listing of SHCC with regard to the renowned NASDAQ or American Stock Exchange will massively inspire the share price. Therefore we believe especially this fact of taking the stock to trade on a major stock exchange will bring a massive thrust of both new retail and new institutional investors driving the share price into dimensions the stock really deserves.
Furthermore, SHCC plans to apply for listing on a major European stock exchange to increase the international exposure and to establish new investor relations in Europe. These two potential listings will open the door for new major institutional investments e.g. national funds and investment bankers should drive the share price up dramatically. For these reasons, potential investors have the unique opportunity to invest in SHCC at its current considerably undervalued price of $0.17 a share.
Subsequently, based on these facts and the remarkable opportunities in the Internet telephony industry, we strongly believe that SHCC is drastically undervalued at a current price of $0.17 and offers a short, mid and long term growth potential of more than 1200%. In summary, we believe that SHCC is currently one of the most exciting and most promising investment opportunities for both retail and institutional investors and that this stock is going to be one of the best performing picks in the following months and years.
NOTICE
The recommendation of Saratoga International Holdings Inc. (SHCC) was done on an unsolicited basis and the team of Stockreporter.de received no compensation for the recommendation. Stockreporter.de was reimbursed its costs relating to staff, materials and equipment by SHCC. The complete recommendation and additional information (e.g. a corporate profile and interviews with the CEO and the CFO) can be accessed at the Stockreporter.de web site at www.stockreporter.de which is going to be the No. 1 Micro Caps and OTC:BB site in Europe and especially in Germany. The Stockreporter.de web site is completely available in German and English. Any Stockreporter.de micro cap recommendation still includes a high degree of risk and is at the investor's individual and own risk. Therefore no claim for any kind of warranty can and will be accepted by the Stockreporter.de.
CONTACT
If you have any further question regarding this buy recommendation or any other inquiry or suggestion, please, do not hesitate to contact Stockreporter.de at any time. We appreciate it very much to stay in close contact to both institutional and private investors and OTC and BB companies:
PHONE: Mr. Dennis C. Hass (+49-172-4062621) PHONE: Mr. Torsten Prochnow (+49-172-4031383) EMAIL: webmaster@stockreporter.de HOMEPAGE: www.stockreporter.de
Copyright (C) 1999 Business Wire. All rights reserved.
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CONTACT: Stockreporter.de
Dennis C. Hass (+49-172-4062621)
Torsten Prochnow (+49-172-4031383)
EMAIL: webmaster@stockreporter.de
HOMEPAGE: www.stockreporter.de
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