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Microcap & Penny Stocks : Genicom (GECM)

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To: ST Trader who wrote (64)8/20/1997 11:13:00 PM
From: Carl Yee   of 231
 
They have 0.43 in the bag for this FY. Looking at the last FY they lost 0.20 in the 3rd qtr. Looking atlast three qtrs. they have improved earnings about 2-3 cents each qtr, sequentially. But let's assuming they do the same the next two qtrs. as they did this last qtr. , they could have 0.91 at the end of the FY; vs. the 0.85 predicted.

Now that was before the DEC deal. GECM estimates that they will grow revenues by $100 million from the DEC deal. Yes, they did say the deal should be accretive or they would not do it. Using their current profit margin, after taxes, the $100 mill would add ~$3million, or about .24 per share. Assume that this is going to add .06 a share for the rest of the FY, we get 0.97 a year.This all assumes that things are just even sequentially on old business for the last 2 qtrs. i don't think they will be, but I am being conservative here.

So at a PE of 29 we could be at ~28. Lots of ifs here, but you may be right to assume better than 20 by December. Let's hope at least.

Carl
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