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Strategies & Market Trends : Three Amigos Stock Thread

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To: Dave Baker who wrote (2537)	4/2/1998 10:12:00 PM
From: Sergio H	of 29382

<Buenos dias. According to Yahoo quote, ATPX has an average daily volume of only 10k shares. Aren't you asking for trouble with this one?> Buenas Noches Dave. Earlier this week Hoak and Breedlove reiterated their buy rating on ATPX and put a value on the stock at $19 or over $30% higher than the stock is trading at right now. The earnings released yesterday was full of good reasons for owning this stock, from the backlog of orders to the increasing cash position. Their contracts are usually at least five years in length and since most of their work is govt. related, the contracts are guaranteed. The co. is currently a Nasdaq small cap and an application has been filed for Nasdaq National listing. The listing will be approved, giving this stock more visibility. ATPX will be at an composite industry trade show this month and I am expecting a news release any day now regarding the co. winning a contract to supply Honda with fuel tanks. This is an initial trial contract and is potentially huge. The company has many products that have possibilities to be very successful in the commercial market. The commercial market is an area that this co. is just starting to exploit. In the next few days and weeks, I am expecting a news release about the Honda deal, Nasdaq listing, and perhaps some suprises including new product introduction at the trade show and the possibility of new analyst coverage. The reason for the low vol. is thr low float. The information contained in Yahoo is not entirely correct. The largest shareholder is Equus Funds with somewhere between 40-50% of the shares. The float is really about 2 million shares. I don't believe that Hoak's earning estimates and valuation fully capture the company's potential. There are several cost cutting initiatives that are being undertaken since the merger to improve margin and the commercial products will have more of an impact on the bottom line than Hoak's evaluation takes into concideration. Hoak's earnings estimates call for a 50% growth rate for next year. I do think that this is realistic. I believe that the co. is attracting institutional investors for a secondary offering later this year. The secondary offering will increase the float size and make this stock more liquid and more attractive to institutional investors. This is a stock for investing and not for trading. The short term events should push the stock to 18 near term and later this year, assuming a succesful secondary offering, we can expect the stock to move in line with its anticipated growth. Sergio

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