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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: Trader J who wrote (22583)	11/5/1999 1:30:00 PM
From: BarbaraT	Respond to of 56532

<ggg>

To: Trader J who wrote (22583)	11/5/1999 1:43:00 PM
From: Canuck Dave	Respond to of 56532

I can see I'm going to have to start paying attention again. This is starting to feel like school, except for all the money. CD

To: Trader J who wrote (22583)	11/5/1999 4:14:00 PM
From: Norm Demers	Respond to of 56532

PSS WORLD MEDICAL, INC. (PSSI: $8.50)* 11/04/99 Initiating Coverage With A Buy Rating Earnings Per Share Old New P/E Ratios (FY:Mar.) 2001E $1.05 $ 8.1 2000E 0.88 9.7 1999A 0.76 11.2 Rating: BUY Change: None 12-Mo. Target: $16 We are initiating coverage of PSS World Medical, Inc. (PSSI) with a Buy rating. Through strong internal growth and numerous acquisitions, PSSI has grown to become the largest distributor of medical supplies to physician offices in the United States with sales of $677 million in fiscal (March) 1999. In 1999, PSSI recorded record revenues of $1.6 billion, up 177% from the $564 million reported in 1995. The stock hit an all-time high of $34 three-and-one-half years ago. In 1999, PSSI has fallen 63% from its December 31, 1998 level of $23.00. The equities of other distribution companies also have been severely punished this year, e.g., the four major drug wholesalers also are down 63% this year. Although PSSI has bounced off its 12-month low of $6.00, hit in mid-October, at $8.50 it remains only modestly above its book value of $6.06 per share. The multiple on fiscal 2000 earnings is only 9.7 times, a 65% discount to the market. On our calendar year 2000 estimate of $1.01, the multiple is just 8.4 times. Although the industry environment in which Gulf South operates does create a fair degree of uncertainty for PSSI's nearer-term earnings, we have a high regard for the company's management team and believe that this stock is attractively priced for aggressive, small cap portfolios. (PSSI's market capitalization is $605 million.) We rate the stock Buy with a one-year price target in a flat market at $15-17.