Trader J's Inner Circle Message Board

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Strategies & Market Trends : Trader J's Inner Circle

NVDA 207.00

+2.2%

Nov 3 3:59 PM EST

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To: AC Flyer who wrote (9935)	2/26/1999 10:58:00 AM
From: AC Flyer	of 56532

VIRGY: $11 now, $18-$20 by year-end WHY: VIRGY earnings will surprise on the upside in '99. Current analyst earnings estimates: 4Q98 $(0.12); FY99 $0.81 My pro forma earnings projections: 4Q98 $0.04; FY99 $1.32 Year-end price target: 11 times projected FY00 EPADS of $1.65+ COMPANY OVERVIEW: Virgin Express is Richard Branson's low cost European airline. Modeled on Southwest, VIRGY flies Boeing 737s from its Brussels hub. IPO'd by Merrill Lynch on Nasdaq in November '97 at $15/ADS, VIRGY traded up to $27/ADR before falling briefly below $6 on earnings disappointments in 2Q and 3Q '98. The earnings disappointments were the result of specific, identifiable problems – namely aircrew recruiting and training costs, partly driven by the need for compliance with Belgian aviation authority requirements. These cost problems have been resolved with VIRGY's move to Ireland and the upcoming issuance of an Irish air operator's certificate. VIRGY's operating statistics – revenue per available seat kilometer and load factor - are very good and are improving. SUMMARY: VIRGY is a well capitalized company (no debt) with visionary leadership (Richard Branson), a proven strategy (Southwest), strong brand name (Virgin), experienced (American) senior management attacking a newly deregulated, unpenetrated marketplace with inefficient competition.

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