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

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To: Don Carson who wrote (392)1/9/1999 1:19:00 AM
From: trilobyte  Read Replies (1) of 768
 
to all:

I think that there is too much negativism on this
thread. There is a difference between being cautious
and being negative.

what we know on the basis of the last 2Q's is that
the bow flex exercise equipment line alone can
easily sustain earnings in excess of 2$/year.

the stock is trading at 22$. It clearly is undervalued
by a large factor based on the bow flex machines
ALONE.

Now if DFX had acquired Nautilus by diluting the stock
or issuing debt, I would be very cautious. Instead,
they payed CASH. It is rare that a company is so
respectful of its shareholders! read: the ownership
of DFX want the stock to go up... So if Nautilus is
only breakeven, we're looking at a reduction in profit
margins but still the SAME EPS on the basis of Bow Flex.
Now DFX has demonstrated their business saviness: don't
expect them to let Nautilus bleed red-ink for long. I
think they have many ideas in mind in order to successfully
leverage the Nautilus brand-name.

But hey! WAIT! Did everyone forgot that DFX will soon
start selling beds? No one's talking about this anymore!!
If selling them does only 1/2 as well as selling bow flex,
we're looking at another 1$/share in a year or two.

Let's be cautious but not negative!

I'm sure Peter Lynch would hold his judgment on this
one, and it's diworsification..., and give the runner
a chance. There aren't too many stocks that go up
20 times in 2 year with the little amount of hype this
company has received.

o.k.

Trilobyte
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