EEC Enviromental Elements "Glowing Plasma" Hot!!! Message Board

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Microcap & Penny Stocks : EEC Enviromental Elements "Glowing Plasma" Hot!!!

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To: Michael Markham who wrote (17)	1/27/1998 11:27:00 AM
From: Andrew G.	of 34

News: Environmental Elements Announces Third Quarter Operating Income biz.yahoo.com I receive this email today and have decided to post it here: Hi, I'm a lurker on the SWAT thread and noticed your mentioning of EEC twice but it seems that nobody took your advice. I've been following it since you mentioned the first time but did not get in until last friday. Would you be so kind and let me know what your targer price is ? TIA Sincerely, Sev First lets look at the news: Today EEC announced earnings with a 22.9% increase in sales for the quarter ending 12/31. But the bookings for the current quarter have almost tripled to $34M and YTD through the past 9 months are up 84% to $64.7M a 65% increase in backlog compared to sametime last fiscal year. CEO says "strong results for the quarter in power and municipal solid wastes area" and new contracts in Korea and India. They have been restructuring to improve profitability which is a very good sign as well. Looking at about 10 competitors in this industry none of them compare to EEC in growth and improved profitability which to me suggest we have a potential market leader in the making. Companies in the same or similar business such as BHAG, DCI and MPR sport pe of 17.1, 22.4, and 16 respectively. It would be fair to say that EEC should have at least a pe of 15 if they can continue to show profitability in their business comparable to their competitors. I see these companies net earnings all over the place but generally in the 6-13% range. If EEC can net the low end (6%) it should make about 2.04M. That means $8.16M year if sales growth is flat. (which it obviously is not). With 6.99M shares outstanding: 8.16/6.99 = $1.17 eps/yr. With a conservative pe of 15 in relation to competitors 1.17 X 15 = $17.50 share price. From May through November of 1997 most of their competitors stocks rose consistently. I'm not an industry specialist but it looks like this summer could show increased demand. So there you have it. I see this company as hugely undervalued at it's current price despite the recent run-up. The stock traded in the $7 range in 1993 but had a rather poor performance up until recently with the new products that they developed.

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