Latest rec. on FAMH by Undervalued Dog 5/2 should bring more buying. Text follows:
By UNDERVALUED DOG
<<Part II: A Follow-up for FAMH
Firamada Inc. (OTC BB, FAMH)
Recent Price: $0.47-0.485/share
Daily Average Volume: 520 K
97 EPS: $0.11/share
97 PE: 4.4
Industry Average PE: 59.07 (Thomson Tipsheet)
Estimated 1998 EPS:$0.36/share
Forward PE: 1.3
Book value: $0.95/share (estimated)*
Price/Book: 0.51
Industry Average of Price/Book: 6.89
Div/Shr: None
Yield: None
52-week Range: $0.09-1.25/share
Outstanding shares: 50 M
Floating Shares: 20 M
Market Cap: $24.2 M
Profit Margin: 10-15%
1997 revenues: $8.5 M
Estimated 1998 revenues: $120-140 M
SEC filing: Yes
* Book value may vary due to the recent acquisitions.
We recommended FAMH on March 2, 1998 at $0.29 to 0.31/share. Since then, the stock price has been as high as $0.70/share and pull back at $0.485 now. We believe the dip has created the best opportunity to buy if you have missed it last time, as the company has entered a new era with dramatic improvement in business operation and completion of several acquisitions. Though the company has been expanding and performing businesses well, two major factors may directly contribute to the price tip. They are the delay of the release of 97' 10-K and the failure of an attempt to merger with ATRIX. We want to emphasize that FAMH fundamentals become better and better in the past two months. FAMH shares have a great chance to reach its upside potential of $2.50 by the end of this year and upside potential of $10.00 by the year of 2000, though fluctuation in the price is expected. Next is an in-depth follow-up for FAMH.
On April 17, 1998, FAMH closed the acquisition of Myriad Employment Services, a $90 Million staffing and employee leasing company based in Long Beach, California. Per terms of the Acquisition Agreement, Firamada is scheduled to make an initial $1 Million payment to the Internal Revenue Service's San Diego office next week. This payment will be followed by sixty monthly installments of approximately $59,500. The aggregate of these payments will total $4.5 Million. The final Agreement does not include the issuance of any Firamada shares and will be a cash transaction only. Also per the Agreement, Ted Colo and Steve Fox will continue in a non-principal management capacity with the company under a negotiated 3-year contract. On April 28, 1998, FAMH acquired Financial Recruiting and Consulting, a niche market staffing and consulting firm located in Wilmington, Delaware. Financial Recruiting and Consulting specializes in placing credit, collection, customer service and system!
s personnel in the Wilmington area. Financial Recruiting and Consulting currently generates annual revenues of $1+ Million. The President of Financial Recruiting and Consulting, Mr. Francis DiMichele, brings 18 years of experience in the banking and staffing fields and is a mainstay in the Delaware marketplace.
Terms of the purchase of Financial Recruiting and Consulting included cash and an on-going employment agreement to retain the services of Mr. DiMichele. FAMH will close another acquisition of a $1.5M staffing company in Connecticut next week. The management told us that the strategy of acquisition is to improve overall profit margin and to bring people with special expertise in staffing industry to FAMH. The management also wants to diversify its income sources in case the economy has a down turn in the future. This is a major reason to sponsor the Morton Downey, Jr. Television Talk Show.
The Morton Downey, Jr. Television Talk Show, co-produced by FAMH and scheduled to appear in 105 markets, is slated to begin production in June. Exact dates and location will be announced at a later date. FAMH will receive a significant percentage of the Morton Downey Show sponsorship revenues ($200,000 to $500,000/month). Firamada's new Internet web site, firamadainc.com, will be fully activated on, or about, May 4th. The Company's web site will initially include job listings, employment office locations, upcoming events and other pertinent Company information (Well, FAMH has a website. FAMH may turn out to be another Internet play as well. Who knows??? You never know how some people on the Street are getting foolish, particularly when foreign money flows into the US market). The web site will eventually also include a detailed investor package that can be downloaded for print-out. Firamada will launch a 10-city speaking tour next month featuring Company!
President Ira Monas. Mr. Monas will begin his speaking tour with an engagement in Las Vegas, NV May 13-15. This tour should greatly expose FAMH in investor community. The revenues from recent acquisitions with current FAMH on-going businesses will generate $120-140M revenues for 1998. The management is planning to continue expansion beyond 1998 and to become a $250 M company by the year of 2000.
Besides these right moves in business by the management, listing FAMH on NASDAQ is another priority of the management. The company has filed its 97' 10-K with the SEC, becoming a fully reporting company. We don't know what the exact plan is, but we do believe FAMH won't have any trouble to get listing on NASDAQ with current expansion and solid business plan. It's just a matter of time. Maybe 3 to 6 months. FAMH has a strong cash flow and businesses are booming. It's just another matter of time when investors realize how the company has been well managed! When investors have unrealistic anxiety to make 100% return in their investment within weeks or months, it's hard to appreciate the fact that the management has turned a $8.5M company into a $120-140M company within several months. By any standard, it's a miracle, if not a magic, in this increasingly competitive industry.
Contact:
Firamada, Inc.
40 Wall Street, 32nd Floor
New York, NY 10005
TEL: 212-425-2168 or 888-831-2442
CEO: Arif Adam and President: Ira A Monas
Company's website: firamadainc.com
PR FIRM: Preferred Financial Marketing 310-789-1132
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STATEMENT OF DISCLAIMER: The information presented in the Undervalued Dog is not an offer to buy or sell securities referred to herein. By no means is the above company information complete. One should obtain financial statements and a full due diligence package, including chronological news releases, from this company prior to reaching any investment decision. One should also use the full battery of available technical analysis, including stock charts, moving averages, etc. and consult a licensed financial advisor for an independent opinion. The Undervalued Dog is not in the financial advisory business. The Undervalued Dog is not responsible for the outcome of anyone's investment decision.
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