ACRT about to move to new highs Message Board

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Microcap & Penny Stocks : ACRT about to move to new highs

ACRT 0.110

-7.6%

Dec 30 4:00 PM EST

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To: Doug R who wrote (5980)	6/15/1998 8:32:00 AM
From: John Chew	Read Replies (1) of 7054

Not necessarily. What is efficient is to have low cost funds. Selling off the TADs allows Actrade to turn over their capital faster. The only negative for 1998, IMO, has been that Actrade has been OVERCAPITALIZED. It does not need all the money on its balance sheet. Yes, ACRT could earn more per transaction by retaining the TADs, but then it would tie up is capital for that period. Say Actrade originates a TAD, then sells the TAD immediately to an offshore bank or US bank (but it is not as profitable for a US bank as offshore due to taxes) at a discount where the offshore bank earns 6.5% let's say. Actrade then receives cash which it deposits into a money market fund or some short-term deposits where the money earns 5% to 5.5% until the capital can be redeployed in another transaction. So cost of funds is 1% to 1.5% in this example--not bad. However, Actrade has never done an adequate job of explaining this to investors. But I think you will see a much better breakout of Actrade's business units and a better presentation of Actrade's goals, opportunities, and prospects in this coming annual report. Most investors do not adequately understand the Actrade's markets. Until year end earnings expect ACRT to drift. It was great to be able to buy ACRT at $12.50. Hopefully, we will get another sell-off on market weakness.

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