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Strategies & Market Trends : Let's Make REAL MONEY (Big, long-term cap. gains)

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To: Don S.Boller who wrote (99)	1/8/1998 10:05:00 AM
From: Papillon	Read Replies (1) of 135

Don, My strategy is very simple, nothing new about it -- look for undervalued stocks with good growth rates and the intelligent use of technology. My current favorite is a little known micro-cap and although I'm very hesitant to tout it, here are some of the basics: Smithway Motor Xpress (SMXC) Market cap -$71M Ave daily trading vol 27,900 shares out 5M float 2.33M institutional holdings 30% insider holdings 46% est eps for 97 $1.12 (20% increase from 96) est eps for 98 $1.34 est five-year eps growth rate of 20% SMXC is trading at a substantial discount to its peer group. Current price is 12 - 13, recent high of 15. As for the technology stuff - Smithway's entire company-owned fleet is equipped with the Qualcom satellite-based tracking and communication system -- lots of benefits to using this. They only keep their tractors for an ave of three years - lots of benefits here. More than 50% of their revenues are generated through core carrier relationships -- this is important. No one customer accounted for more than 10% of revenues. Their major customers inclued GE, Goodyear, LTV Steel and York International. Short term things in their favor: extremely mild mid-western weather so far this year means they probably hauled more than usual in dec. Low fuel prices adds to the bottom line. Most of this is taken from a Schroders' analyst's writeup when they began coverage with a Buy in Oct with a target of $20. Zacks shows three strong buys, which have stayed strong buys even as the stock pulled back from 15 to 11 something. At 12.25 I think it is a bargin, but it is thinly traded and should only be purchased as long term investment (which generally means to me, I have to admit, a year or so). Longer term investments should have a high likelyhood of a regular dividend -- such as PFE, which I believe has issued a div every quarter for something like 60+ quarter. Wow, that's the longest write up on SI I have ever done. Best, John

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