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Non-Tech : United States Enrichment Corporation (USU)
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To: Stock moghul who wrote (30)10/16/1998 8:54:00 AM
From: Terrapin  Read Replies (2) of 81
 
Well, here's my take on it.

Revenue of 307.9 vs 440.4 same quarter last year:
Increased electricity costs:
Explained by the nature of there business that revenues should be viewed over a longer term. Fine, I can except that.

Believable but on page 6 of the prospectus they list as a Competitive Advantage a low-cost power arrangement which will continue following privatization. That doesn't mean that they were lying; they may have been charged the maximum 2c/kWh.

Special tax benefit:
I don't know anything about this. Is it temporary? If it is then should we expect net income per share to be $0.09 from now on? I had viewed this company as bringing in $0.60-0.63 per share.

Dividends:
They have the statement that they are confident of continuation of strong margins and dividends. Reassuring; page 9 of the prospectus says they intend an initial quarterly dividend of $0.275 per share subject to earnings, financial condition and cash requirements. The question is whether the current situation merits a cut.

I agree that this company should be analyzed over the long term. I'm a little disappointed but I definitely won't sell. This will just make the dividend a little more exciting :)

I look forward to comments from Jim and Mike - they've looked into this more than I have.

Comments welcome,
John
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