JDN: Here was your original question
Dear vpelt: The only negative I get from your report (if I am correct
that in fact it is a negative) is that you say Jenkins feels they will
have a SUSTAINABLE 10% net profit after 2,000. Earlier I read that
Jenkins expects 160,000,000 in sales around then. 10% is only 16,000,000 and assuming we have around 25,000,000 shares outstanding by then that is only 64 cents a share. Using a multiple of say 15 (a discount from the indicated growth rate due to small cap nature of company) and one an indicated share value of $9.60. That is not very
impressive. Am I missing something here? JDN
And here is Scott's response
Subject: Re: A Question RE: Shareholders Mtg.
Date: Tue, 03 Feb 1998 12:44:36 -0800
From: Scott Liolios <Liolios@PacificGP.com>
Organization: Pacific Consulting Group
To: vpelt@jetcity.com
References: 1
Hello Vince,
It was nice to put a face with a few of the investors, and thank you for introducing yourself. Your friend was very shrewd when reviewing the numbers. His conclusions based on what was said are somewhat accurate. It was exactly what I was thinking when the slide went up on the screen.
However, in my opinion there are a few changes, assumptions and corrections that should be considered. Let me explain.
First, remember that the $160 million was not what Jenkins "expects" (as your friends memo indicated), it was what he staed as a goal publicly. You will seldom see CEO put in writing a forecast publicly. Therefore they tend to be a bit conservative. Secondly, even if those are the accurate numbers, I do not believe in the multiple of 15. If I am not mistaken the ave. multiple of the S&P is greater than 20X. And at the company's growth rate and gross margins, I believe a higher multiple may be warranted. Third, If you believe the analyst reports (Emerald, Red Chip, and Hannifin project $76, $118, & 125 million for 1999 respectively.), then it is easy to see how the company can surpass $160 million by 2002.
It is my opinion as an investor, the most accurate models will be shared by analyst who cover the company. Please remember that this is my opinion only, and I will try to get a comment from management.
I hope this helps. Thank you for support and interest.
Scott Liolios
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I will post any comments I get from mgt through Scott - vpelt |
