Mr Pink - I'm sure you heard of the amazing upgrade report from Bear Stearns on FHT - Here are some excerpts to chew on. It seems we could be in for a great ride on this stock - a true undervalued internet player in more ways than one. Once this story gets out the stock should zoom - glad to know you are still a fellow shareholder. Great Pick - I added more today - Thanks again - Here are the excerpts someone sent me:
*** Fingerhut, which historically has been a catalog of general
merchandise targeting the lower income spectrum of the U.S.
population, is in the middle of a rather remarkable transition.
We believe that investors will more fully appreciate the benefits
of this strategy as we move to the middle of 1999. Remember, FHT
is the company that created Metris (MTRS-$44) to leverage their
credit data base and spun it off to shareholders in 1998. We
believe that FHT plans to pursue a similar strategy with their
Internet ventures
-Fingerhut Business Services offers incremental growth and
could be the hidden asset to FHT investors- Fingerhut realizes
that many retailers and manufacturers want to either sell via
catalog or now more likely, sell via e- commerce, but are unable
or unwilling to do the order processing, warehousing, pick and
packing, shipping, customer service, and returns as they are
unaccustomed to dealing with customer orders on a one to one
basis. Fingerhut offers a menu of services ("from the website
back") and indicates that they have signed up a number of clients
(10 currently) and those 1998 revenues which accounted for close
to $10 million, and expected to be at least $50 million in 1999,
could exceed $100 million in 2000. The key here is that by
utilizing its 9000 employees, 2200 tele-marketers, and 3
distribution centers, FHT is able to offer something to retailers
and manufacturers that nobody else is offering on a soup to nuts
basis. Additionally, Mr. Lansing indicates that operating margins
in this sector are a healthy 10%. Along with current FBS deals
with Wet Seal, Intuit, and Kmart, we look for some big
announcements to get investor attention in the first half of
1999. Investors getting excited about the exploding growth of
Internet retailing, should wonder how all of these web merchants
are going to be able to handle all of the volume that is
predicted
-Fingerhut has acquired an interest in a string of e-commerce
start ups over the past months, including PC Flowers.com,
mountainzone.com, and freeshop.com. The game plan on these
acquisitions is to buy a 19.9% interest in these businesses (as
they are currently losing money and FHT does not want to consolidate their results). At the time of purchase, they also
obtain warrants to allow them to gain a 60% stake in the entity
with the plan to utilize the FHT clout to gain buying and
database efficiencies. The company's plan is to do an IPO of some
or all of these e-commerce companies at the 15% level so that
post deal, FHT would still own 51% of the entity or more. On this
front, we think a public offer for PC Flowers.com and
freeshop.com are likely 1999 events. Management also indicates
that we should see 10 to 15 more announcements throughout the
year, beginning over the next few weeks.
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