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Non-Tech : International Game Technology
IGT 16.56-0.2%Nov 3 3:59 PM EST

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To: Ann Corrigan who wrote (36)9/26/1997 11:37:00 PM
From: Steve Smith   of 63
 
Ann,

Let's do a comparison between IGT and ALLY.

ALLY:
Sales total for 445.1 Millions for the trailing twelve months(TTM).
Shares outstanding 31.9 million.
Float is 11.8 million.
PSR = 0.45

IGT:
Sales total 737.6 Million for the trailing twelve months(TTM).
Shares outstanding = 115.5 M.
Float is 110.9 million.
PSR = 3.37

The important factor is PSR (price to sales ratio).

ALLY is selling at a discount to IGT. Granted the profit margin is slim and they have a negative EPS. Once they can control their operational costs, the profit margin will grow. And thus the postive eps will show up.

Please note that QNTM once traded @ 5 because it had a negative eps. However, their TTM and PSR were comparable to their competitors, WDC and SEG. QNTM was able to increase profit margin...thus increase there EPS. I hope this helps.
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