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Microcap & Penny Stocks : ACRT about to move to new highs
ACRT 0.110-7.6%Dec 30 4:00 PM EST
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To: Mr. Pink who wrote (1025)1/4/1998 10:47:00 AM
From: John Chew  Read Replies (3) of 7054
 
Valuation of ACRT. ACRT's five year growth rate of earnings has been over 60%. Let us say this continues for the next five years. Some might say their growth rate will be far higher with more infrastructure, name recognition, more industry penetration and MORE COMPETITION. Some might say the growth rate will slow down.

But anyway take 5 years at 60% growth in EPS equals=
1.6 ^ 5 = 10.49. Multiply this by last year's EPS of $0.28 to
get $2.94. Now do not make the mistake of putting a multiple of
20x or 30x to estimate a $88 share price.

Take today's 10 year or 30 year bond yield, say 5.9%. Some might say bond yields will be 4% some might say 8% in the future. But let
us go with the market's view.

Divide $2.94 by 5.9% to get approximately $50 per share.
I am assuming that at the end of year 5 there will be no EPS growth
at all. Some might argue my assumptions are too aggressive in
the beginning but too conservative at the end. Let us keep
it simple.

So based on THESE assumptions I would say price is below
value. However, assumptions on five year time horizons may be subject to error. Remember the Russian five year plan or Clinton's global warming initiatives.

But all of this means nothing after I hear that Amos Aharoni wear cheap suits and rides the subway to work.

I am short after this most recent run-up and seek your advice on
where to cover shorts.

NEED YOUR ADVICE ON WHERE TO TAKE SHORT PROFITS!
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