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Non-Tech : Office Product Stocks - ODP/SPLS/OMX/VKNG/CEXP/OFIS/BOP
SPLS 10.250.0%Sep 28 5:00 PM EST
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To: AL TOTH who wrote ()1/18/1998 11:01:00 AM
From: AL TOTH  Read Replies (1) of 297
 
RE; CORPORATE EXPRESS



I am a long term investor in CEXP and specialize in office products
companies as I spent 20 years in this industry. I listened to their
conference call after their earnings report this week and would like
to relay to any interested parties what I heard.
1. CEXP basically implied that Wall Street was not giving their
stock price fair value based on a 30+% growth rate,i.e. an $11.25
stock price for a multiple of 15 for a significant growth rate.
So therefore they were going to guarantee a 20-25% earnings growth
over the next decade but anything in excess of that will be expensed
in marketing and sales support to increase their penetration of
the large corporate market. I have listened to enough conf. calls
to realize that CEXP was taking the aggressive position of telling
Wall Street that it wasnt going to play the earnings game if it wasnt getting rewarded for
it.
2.Unfortunately some analysts like Goldman Sachs Fassler had trouble
absorbing this concept and just recalculated 98 earnings based on 20%
growth and come out with a $9 stock price which is interestingly
where CEXP opened the next day. This 20% earnings news was all that
seemed to be deseminated to even more unknowledgeable money managers
and the panic sell was on for the next three days as CEXP slowly
slipped down to 8 3/8 by THURS. close.

Then CEXP took big step #2 and came out with the 25% share buyback
on Friday. Once again they were making a major statement to Wall Street that their
stock price is grossly undervalued and they were
willing to put their $ where their mouth is.

IMO CEXP is the best buy on Wall Street today at $10-$11. KO
gets a 40+ multiple because it provides CONSISTENT earnings growth
of 10+% every year. CEXP will provide CONSISTENT earnings growth of 20+% over
the next decade and they are at a low teens multiple?
And also they will probably have even more earnings that will be expensed instead for
marketing etc. expenses.

One day in the next couple of months Wall Street and some of these analysts will
suddenly put 2+2 together and get 4 and CEXP will
easily reach $20+ per share. This is one hell of an intermediate term
buying opportunity. You can take this to the bank!!!!

AL
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