EN POINTE TECHNOLOGIES (ENPT) Message Board

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Technology Stocks : EN POINTE TECHNOLOGIES (ENPT)

ENPT 0.0001000

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Oct 8 5:00 PM EST

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To: ratan lal who wrote (458)	5/1/1998 1:56:00 PM
From: Rob S.	Read Replies (1) of 537

I don't agree that value added has no merits for the industry as a whole. In fact, it is a better tact than that on which ENPT has based their business. They have no other choice but to pursue this strategy - it's either do it or die. But I think the competition for bringing technical services to companies is severe, with many better-entrenched and highly skilled & specialized competitors. To try to change the way you do business at a time when skilled labor is at a high premium is not an enviable task. Another indicator of the degree of the problem is the admitted defection of large numbers of salespeople. En Pointe lost 41 salespeople (I don't know if that was net or a total not subtracting new hires). When experienced commissioned salespeople are leaving in droves it is not because the company has gone to the wrong coffee service in the field offices. It's a sign of much deeper problems. And the loss comes despite a higher overall sales number. That enforces the knowledge that margins are being severely squeezed and sales are getting harder to come by. When you consider the jump in the cost of sales in the balance sheet, you get the clear picture that the sales force is falling into disarray and low morale. They are paying a higher percentage of revenues for the sales efforts yet are seeing widespread defections and a loss of sales momentum. These problems come at a time when the company must ramp up tech support efforts and equip more support facilities. They are also trying to develop aggressive software support systems. This is going to be very difficult to achieve. Even if successful, something that won't be known for at least six months; the shift will be disruptive to current cash flows, and positive results won't show up `til then. ENPT has such a low apparent P/E that many investors may be suckered into buying at this price. Unfortunately, the stock price does not fully reflect the risk and losses that En Pointe is likely to incur going forward.

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