ADMG Advanced Materials Group Message Board

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Microcap & Penny Stocks : ADMG Advanced Materials Group

ADMG 0.0270

0.0%

Jan 9 9:30 AM EST

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To: Pete Ryley who wrote (168)	12/11/1997 9:11:00 PM
From: Jumpin Joe	Read Replies (2) of 217

Pete, One thing to be careful about in 1998 is the tax situation. In 1997 (as of the first 3 quarters), ADMG paid virtually no taxes (I'm assuming they have some tax losses carried forward). I would suspect that these would run out in the near future. When that happens, earnings and earnings growth will take a hit. They have reduced their number of outstanding shares by 15-20% which will soften the blow, but the tax hit will likely take a "real" 20-25% bite out of earnings in 1998. If ADMG grows at 20-25% next year, earnings will look flat compared to 1997. Most do not look deep enough to understand where the decrease in earnings came from. They just see they have flattened out and assume growth has slowed. Overall, this will likely hinder the stock appreciation for a while. Other than that I like this company, fundementally very solid. However, I am staying on the sidelines until I get a clearer picture of the tax situation. I have seen this same effect in other companies. Best of Luck! JJ

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