Acey:
With all due respects, financing activitities such as borrowings, sale/purchase of stock is source of cash, but it is not cash flow.
You are partially correct in your description, but cash flow from operations ("CFO") is calculated beginning with earnings. Depreciation and amortization are what is called a non cash expense and is thus added back to net profits to get to cash flow from operations.
You are correct that PRST has very little debt, they could only borrow 10 mm pledging all there assets.
As to the model, if you want to discuss presstek specifally, its 100-65 (not 50) cgs-25 + royalties. In fact, for a company with "leading edge technology" it only has 35 % gross margins (intel nets 25% after all epenses including operating, R and D, pension Depreciation etc)
Note the growth model is strong only because of low revenues to start. (80 mm year isn't exactly a high starting point/denominator)
As to whether this is a 20 dollar stock, I mispoke, this where I plan to cover, and I am not greedy. This will down as another LUTZ folly.This is no xerox, its competitors will not surrender the market to PRST. Incidently, if you go to the Imation home page, I can find no notation of there deal with presstek - its obviously not a very important piece of there business. I did note they plan to enter the digital plate market (look under publishing). Is this the beginning of competition for PRST --- as margins compress watch out below!!!!!!! |
