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Non-Tech : ACAR
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To: Mickey Szilagyi who wrote (6)2/11/1997 9:07:00 PM
From: Joe Basile   of 14
 
Charts do a nice job of letting you know where the price of a stock has been, It is not clear to me that they are a predictor of where a stock will go. Its tough to find useful info on this company, but the primary reason it is declining is two-fold. 1) The lawsuit. The company has put aside the money it believes it will be sued for.( I forget the number but it was not that substantial). They believe the lawsuit is frivolous and the plaintiff will receive a much smaller amount than they are suing for. Of course if the number is greater, which is certainly a possibility the stock price may be affected. It is likely the market has over-reacted to the lawsuit in my opinion.
2) The industry in general is struggling. Default rates are up...so they tell me, on auto-loans which of course can impact earnings in a negative way. Take a look at Jay Hawk (jacc) and Mercury Financial (MFN) if you really want to see some ugliness.

I would add...on a positive note, that if ACAR is successful in acquiring receivables from these two dying competitors, that there earnings could be impacted in a positive way. I wouldn't put the farm on this thing tomorrow at 7:30, but I can tell you that the company is not in as much trouble as the stock price makes it appear.

I'm getting the crap beat out of me on this stock, but I guess I'll hang in till the bitter end. Good luck.
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