Well, James, I jumped in with both feet on EBSC today in the late day selloff. My reasons are as follows:
(As of 10/30/99, shares outstanding of 14,934,000)
Book value - $15.31 per share (before Q4 earnings of perhaps $.70)
Current assets less all liabilities ("net-net") - $7.60 per share (before Q4 earnings)
Price/sales - 11%
Earnings per share (1999) - $.70 estimate
Cash Flow per share (1999) - $1.70 estimate
November same store sales - +6.5%
$24 million buyback authorized - 1,118,000 shares purchased for
$7.3 M as of 11/18/99 (avg $6.53) - leaving $16.7 M, which would buy
3,340,000 shares more at $5, under the existing authorization.
If they were able to buy 3.34 M more shares at an average $5, and adding in rough earnings of $.70 for Q4, shares O/S would go to
11.594 M, book value to about $19.19, and net-net to $9.25.
The numbers speak for themselves. The point of the preceding paragraph
is to point out what will happen to the values if the stock languishes
at this price level - we will end up on the current buyback authorization at 26% of book value and 54% of net-net.
If this is not a great value, I don't know what is. As with you, it is number one on my value parade. I don't have a number two. I also think this makes at least 3 of us to buy on our thread.
Disclosure - decent-sized position, average cost $5.12
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