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Microcap & Penny Stocks : COHT--$2 Turnaround Already Profitable
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To: Richaaard who wrote (9)5/30/1998 12:55:00 AM
From: StaggerLee  Read Replies (1) of 33
 
I've taken a closer look at the Q1 numbers and they look really impressive underneath the surface. Overall sales from continuing operations were up 22%. Keep in mind this company sells both equipment (as well as spare parts) and epoxies/grouts. The latter are the higher margin products. According to the Q1 MD&A, equipment and parts sales were flat, which is actually quite impressive given that foreign sales were down 22% (down 53% to the Far East). ALL the growth in Q1 came from the higher margin epoxies/grouts, which represented 27% of Q1 revenues as compared to only 12% of revenues for all of 1997 and 1996. This is a trend you'd like to see continue.

If the rest of the year goes like the first quarter, you're probably looking at 1998 sales of $12-$14 million (note that they have expanded their sales staff, which should impact upcoming qtrs). This means about $6 million of gross margin and $1 million of net income, or about $.37 a share - for a company growing at >20% a year with increasing margins! A P/E of 12 gives you $4.50.

This is a simple, unglamourous company, but there is huge potential. If Asia weren't all messed up this company would be doing $.50 this year and $.62 in 1999, and be trading at $8-$10. Let it ride!
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