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Gold/Mining/Energy : Direct Focus Inc. (DFXI)

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To: Clement who wrote (325)10/8/1998 8:15:00 AM
From: BEEF JERKEY   of 768
 
Hi Clement:

I know that when I talked to the company they indicated that they had all the sales they could handle with the level of advertising they were currently doing which apparently was not that aggressive. Sales may start to weaken but I think the company can counter that with a harder advertising push. The company is currently growing at 149% a year. This growth may slow (Bowflex) but I think it would still remain positive and they have the new product coming on line so personally I doubt that they will have cash flow issues. We are heading towards a slowdown but also to lower interest rates. A large majority of the economy will be unaffected by a slowdown so don't be too surprised if DFX continues to amaze. After all they did have a great Sept.

Still the market may not see it that way. Another blow off may be coming in the near term which should be a buying opportunity.

But really minus there cash position they are now trading at about 6 times this years earnings and the TSE is already off 1/3rd. At what price are people willing to part with their shares?

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