Candle stick
Lets crunch out the numbers. This quarter, APCC made
172Mil, and the news release state that this represents
20% of what management expects to do for this year.
So we get
1st Q 2nd Q 3rd Q 4th Q yr
172 198 241 249 860 to be compared to 1996
142 161 194 210 707 implying
+21% +23% +24% +19% +22%
That the company can be so precise in their forward
looking statements suggests that they are very confident
about their predictions, otherwise they'll have
the likes of some of the posters on this thread at
their throat (no names please!). It also insures that
the analysts don't go over board with optimistic
predictions.
Earnings require more work. Company states that
operating expenses will in line with revenues, or
up to 5% higher than revenue growth.
o.k, model 1 for total operating expenses gives
1st Q 2nd Q 3rd Q 4th Q yr
45.2 52 63.3 65.5 226
and model 2 (+5%)
1st Q 2nd Q 3rd Q 4th Q yr
45.2 63.3 74.6 76.8 259.9
now for cost of goods sold. This quarter, they were
55.7% of sales. Last quarter, 56.4% and the one before
that 57.6%. It seems there is a trend here, due to
APCC developing higher end (server?) products. So
lets assume that next three we'll see 55.2%, 54.7 and
54.2%.
that gives me, for cost of goods sold
1st Q 2nd Q 3rd Q 4th Q yr
95.8 109.3 131.8 135 472.9
Operating income comes in at
1st Q 2nd Q 3rd Q 4th Q yr
31 36.7 45.9 48.5 162.1 model 1
31 25.4 34.6 37.2 128.2 model 2
Now the tax rate seems fixed at 33.5%. Assuming
negligible "other income", I get
Net earnings,
1st Q 2nd Q 3rd Q 4th Q yr
21 24.4 30.5 32.3 108.2 Model 1
21 16.9 23.0 24.7 85.6 Model 2
Finally!!!! taking 96Million shares outstanding
for next 3 quarters,
eps,
.220 .254 .318 .336 1.13 model 1
.22 .176 .240 .257 0.89 model 2
In 1996, APCC did 98cts/share. So it would
seem that APCC has guided analysts in a very
conservative way, with eps growing, in model 1
by 15% and in model 2, actually decreasing.
Clearly, the make or break will depend just
how well their new product (symetra) is
accepted and whether they can control expenses
in quarters 3 and 4. If they do, I can
imagine APCC doing between 1.2 and 1.3$ this
year (after all, the guidance should be viewed
as conservative). At a p.e. of 20, we're looking
at 24-26$, and at 25, 30-33$ by year's end. A
patient investor therefore could potentially
have a return between 26% to 74% if he bought
APCC at 19$. Not huge, but very decent.
I don't predict that APCC will rise significantly
short term, but it shouldn't drop too much
either.
Cheers,
Trilobyte |
