Electrohome (EL.X-T,EL.Y-T)Baton Bcast (BNB-T) CTV Event Message Board

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Gold/Mining/Energy : Electrohome (EL.X-T,EL.Y-T)Baton Bcast (BNB-T) CTV Event

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To: Scott Mc who wrote (1)	11/2/1997 11:52:00 PM
From: M. Merriam	Read Replies (1) of 38

I took a look at EL tonight. It's not a simple business. The book value at the end of the previous fiscal year was around $8.00/sh. After taking expenses of $20 million or so on its display business, I'm guessing that book value dropped to around $5.50/sh. The annual report mentioned something like a $15 million profit on the Baton transaction, although the 3rd Q report mentioned that the profit should more than offset the display writedown, so let's put it at around $20 million. We're back to about $8.00/sh book. But book value can be misleading. Earnings drive market values. From an earnings perspective, I'm guessing that, barring unusual items, they might make around $1.00/sh next year. But that's a wild guess on my part. What do you think? Asian exposure is a potential negative--they might have some they might have some difficulties holding onto recent gains there: "We continue to derive about 95% of Visual Communications revenues from outside Canada. Projection Systems division benefited from its foreign market initiatives, achieving outstanding sales growth in particular from the quickly developing Asia Pacific region. The division recently expanded its presence in Singapore to better serve that market" (from their web site). A plus is that they have unloaded their monitor business. Who owns EL? Is there a majority shareholder? Who owns The Telegraph Company (or whatever it's called) which is the (almost) majority shareholder of Baton? You are right about the 4th Q profit potential looking excellent, and that should put some upside into the stock. --Mike

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