Sandra --
With today's report, LEAP now has three quarters of declining revenues on razor thin earnings. I don't think it looks too good.
Given THNK's much brighter prospects and good fundamentals, my money is on THNK.
Both companies are in the same industry sector and are direct competitors, but THNK has projected earnings of $0.65 for FY 99. THNK keeps winning big ad campaigns, while there have been no real wins reported by LEAP for a very long time.
LEAP has projected earnings of only $0.05. With today's rise in LEAP's price in anticipation of the earnings report, LEAP now is trading at 3 3/8 with a leading PE of 68. THNK, in contrast, has been beaten down (due to the market in general and its own missteps) to the point where it now is trading around 7 with a leading PE of only 11 and a growth rate of nearly 150%. I believe there is much more potential with THNK then with LEAP. But of course, fundamentals don't seem to matter much in this market, so that means LEAP will probably see an unjustified jump (no pun intended).
I've recommended THNK three times now -- first time it went from 11 to near 40 (I sold at 23 1/2), second time it fell from 19 to near 6 (I sold just under 17), and now at around 7 after being beaten down and appearing to have hit bottom. Thus, my track record with THNK is mixed. Nonetheless, I'm beginning look for high growth, hot sector stocks like THNK while they are beaten down. I'm staying away from LEAP, however, due to poor current and future fundamentals.
At this point, you probably are sorry you asked for my opinion! By what way, what's your view? Tomorrow should be interesting for both LEAP and THNK (E&Y financial review is due out).
-- Jim |
