Any thoughts on QUST (earnings due this AM)?
Questron Technologies (QUST). Currently at $5 5/8, PE of 10. Earnings due this morning, expected to be around $0.15 to $0.16 for the quarter (vs. around $0.10 fully diluted last year). Projected earnings for the year is $0.72. Stock has bottomed out after selling from conversion of preferred stock (preferred was converted to common at a 1.4375 to 1 ratio, so a lot of people sold their "free" shares), and relationship with Biltmore Securities (their underwriters from a while back) who are in trouble (but according to an analyst from Ladenburg Thalmann covering the company, he doesn't feel Biltmore has any inventory remaining in QUST).
QUST is in the very fragmented electronic fastener industry. Internal growth of 15-20%, also in major acquisition mode, all of which have been immediately accretive to earnings. Two letter of intents have been signed for additional acquisitions, which will add another $23 million in annualized revenue. CEO projects revenue run rate of $100 million by end of this year, $200 million by next year.
Buy recs from Ladenburg Thalmann and JW Charles. Price target for year-end is $13 (conservative trailing PE of 18).
QUST warrants (QUSTW) may be a good leverage play (currently at 1 19/32).
1996 Revenues: $11 million, eps $0.36
1997 Revenues: $25.7 million, eps $0.59
1st Qtr '98 Revenues: $10.4 million (vs. $3.9 million last year)
1st Qtr '98 EPS: $0.16 vs. $0.11 (fully diluted)
1998 projected eps $0.72 (does not factor in any acquisitions)
Gator
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