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Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services
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To: JOEY who wrote (2996)2/10/1998 2:45:00 PM
From: Little Engine  Read Replies (5) of 27968
 
Does anyone still believe that mutual fund managers are ready to pounce on this thing?

Ira said in the last conference call that $12 million of the credit line would be borrowed soon for acquisitions. He also said about 28 million shares are outstanding. In addition, I think we can safely assume (since he claims that FAMH is generating 30 percent net profits), that Myriad (which would become the lion's share of the revenues) would drag down the net margins for this year.

So.... $12 million debt divided by $7,560,000 in equity (.27 x 28 million shares) would give us a debt/equity ratio of about 1.59. How does that stack up against other small staffing companies? Let's look...

Company.................................Debt/Equity Ratio

SOLP............................................0.00
HIR...............................................0.02
ASIS.............................................0.07
FAMH...........................................1.59

Even if the financials came out today, the mutual fund managers would look and see a .27 stock carrying:

1) questionable current margins
2) falling profit margins in 1998
3) twice as many shares as the other three companies COMBINED;
4) a very uncertain profit growth rate due to a blizzard of acquisitions, 5) and a heavy debt load.

Why would they want this stock?

Does anyone agree with my analyses yet?

L.E.
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