Stock Watcher, as you requested, here is my take on PROG. The way I see the e-commerce scene, most of the future winners will not be the new start ups, but those established companies that are expanding their sales channels from a very solid base to include the internet, companies such as Federated (they just bought Fingerhut to expand their catalogue and e-commerce), Wal-Mart, Home Depot, and very few of the new entrant that have rapidly sestablished a "brand name (like AMZN)
One of these future winners in my opinion, is PROG, they have very well established channels of sales via catalogues, direct mails etc. and have recently added e-commerce to their channels. Their E-commerce is growing extremely rapidly and their traditional business is growing at about 30% per annum. They have finished last year with actual earnings of $.66/share and management (very conservative in forecasts) back the street number of $.85 to $.90 for this year.
I am now raising my 1999 to about forecast which was $1.20 to $1.46 ($.35, $.37 $.31 $.42) with sales roughly at $333 MM ($80 MM, $84 MM, $75 MM, and $94 MM), thus I am showing a top line growing at 42% over this year. This should justify sometime during this year (without internut mania) a PE of 30 on $1.46 or some $44/share some time in
1999 and a target of $60 or better in the next two years (barring a bear market when the PE could easily go down to 10 to 15).
Zeev |
