Yes, there was an Institutional only conference call.
But, the replay of the call wasn't available. Anyway,
here's a summary of Robbie Stephens REXI research report
released this morning. Etrade Professional Edge customers
can pluck the entire report from ProfEdge website. The
report was issued after the conference call this morning.
Synopsis:
* Off-Wall Street, a consulting firm, issued a report questioning numerous aspects of REXI's business including its ongoing
viability, accounting treatment, and insider transactions.
While we will attempt to answer many of the questions raised,
the key points are as follows, in our view:
* REXI's cash flow from the core business is approximately equal to reported earnings. REXI should exceed our September-quarter EPS estimate of $0.51. We have great confidence that our $2.90
estimate for CY1999 is low. REXI trades at 7x projected 1999
EPS.
* REXI's business outlook has never been better. In commercial
real estate, numerous Japanese banks are expected to
liquidate U.S. assets at distressed prices over the next
few quarters. In small-ticket leasing, the company is expected
to announce the signing of a major contract with a Fortune
100 company in September.
* We find REXI extremely well capitalized, with 2/3 equity and
1/3 long-term debt. The company is not dependent on the equity
markets to grow.
CONCLUSION: REXI is a combination of 3 businesses whose
accounting is confusing, but is economically fair and meets
GAAP standards, in our view. We believe earnings and cash
flows area and will continue to be equal or better than
reported earnings. REXI is our favorite pick today with a
$40 12-month target.
Longs: Be patient as there will be a short-covering rally
in the next couple of days once the dust settles and the
big boys come to scare the shorts out of their pajamas..
Shorts: Cover your butts cause big buy blocks are coming
soon. Mr. Pink don't get too greedy. It is so obvious
that you have a heavy short position and you are trying
to scare the longs on this threads. Unless you have
an inside track on REXI and know for sure that their
accounting practices are inappropriate, don't spread
the B.S.
Note: I have been long and short on REXI the last few days.
But, REXI reminds me of what happened to TWLB a couple of
weeks ago.. Heavy shorting and short-covering drove the stock
down and up very quickly...In TWLB's case, once the dust settled
and the real "truth" realized, a heavy short-covering rally
came a few trading sessions later. The same will happen to REXI. |
