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Non-Tech : Borders Group (BGP)

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To: Trevor Quest who wrote (164)2/12/1999 3:46:00 PM
From: simarx   of 411
 
Newsletter Recommendation:

Borders Group Inc. (NYSE: BGP)

Profile

Retail Services Sector
Borders Group Inc. is the international mother company for Internet and mall-based superstores (book, music, and coffee retailers) Borders, Waldenbooks, and Planet Music and CD. Through its subsidiaries, Borders Group Inc, is the second largest operator of book superstores and the largest operator of mall-based bookstores in
the world, based on both sales and number of stores.
See web site bordersgroupinc.com

Buy Recommendation

We look to BGP as a good medium to long term play. One of the fastest growing areas in specialty retailing has been the "superstore" category due to strong consumer acceptance. This growth pattern is expected to continue and improve through 1999.

Borders Group Inc. is currently trading at 14 3/4 from a 52 week range of 41 3/4. If you compare the 12 month trading history of Borders Group Inc. and Barnes and Noble you will notice similarities in price fluctuation from June to September. This may have been due to market sentiment resulting from Amazon.com news releases.

February 3rd Borders Group Inc. announced an agreement to be the exclusive online bookseller for Infoseek's GO.COM. With Disney's 43% ownership stake in Infoseek and financial commitment to GO.COM, we forsee this site receiving unprecedented promotion through Disney properties.

Solid Company

BGP has good fundamentals. For 52 weeks ending 10/25/98:
Profitability: 3.4%
Sales: $2.51B
After tax income: $84.3M
P/E: 14.48
Expected growth in 1999 20%.

Now contrast those figures with Amazon (Nasdaq: AMZN)
Profitability: - 21%
Sales: $610M
P/E: n/a
After tax income: - $87.5M

Borders Group Inc. is profitable, currently undervalued, and has a promising contract with Disney. This stock shows nice upturn potential.

related links:
biz.yahoo.com
Disney news:
biz.yahoo.com

From investoralley.com yesterday evening.
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