CTCK - Just got this in my E-mail:
STRONG BUY / AGGRESSIVE GROWTH
OTC BB - CTCK
Current Price $1 - $1.25
Float 1.8 million
3 Month Target Price $5.00
September 1, 2000
STOCK COMMUNICATIONS GROUP
Actively seeks and reports on undervalued and overlooked companies, so you get the information first.
There's nothing more we like to see than downward charts on companies with strengthening fundamentals - as long as we don't own them! CraftClick.com, Inc. (OTC BB- CTCK) appears to have run its course on the downward trend and, in our opinion, is headed north once again. After coming off a recent high of $4 in May, the chart seems to have found steady ground in the $0.75 range. Good news for new investors!
This is THE premier arts and crafts Internet leader, and is indeed a force to be reckoned with since the company's inception last year. OK - we've all "been there and done that" with the Internet alphabet soup companies (i.e. B-2-B, B-2-C, $20-2-$0.10). So what's the big deal with CraftClick? Well for starters, to the best of our knowledge, they own more affiliated craft sites than anyone else. To date, they have acquired 18 industry related sites. This has created an EXTREME barrier of entry to other crafting Internet wanna-bees. No question, the cost in doing so initially has been dilutive to shareholders. However, the alternative is loading-up the balance sheet with debt and doing equity placements at ridiculously low prices. In effect, this is the price one pays to get a company off and running in a frenzied heartbeat. At the current price levels however, new investors have the opportunity to enjoy a quick recovery in this company's previous cardiac kid look-alike trading chart.
"Join our team" has been the company's motto. "We believe by controlling all the significant entry points to arts and crafts on the Internet, we have created a barrier of entry that will discourage many new entrants into this field and make it almost impossible for our current competitors to catch up." - Peter Yollin, Chairman and Chief Executive Officer. We agree - instead of recreating the Internet wheel, CraftClick.com, Inc. has assembled an extraordinary conglomeration of suppliers, idea generators, and has developed a market place for the hobby enthusiast via equity acquisitions.
According to Bill Gardner at Craftrends Magazine, "While some craft dot-com companies are struggling to get off the ground, and craftshop.com has already filed bankruptcy, at least two craft dot-coms appear to be rising to the top, utilizing philosophies different from others in our industry. Offering business-to-business opportunities, discount merchandise, and a network of niche Internet sites, among other features, the Artisan Network and CraftClick.com are both rapidly approaching profitability - something many of their competitors won't be seeing anytime soon."
The key words here are future profitability. According to management, sales costs, as measured in terms of "buying" members per sites acquired, have averaged $4. This may also be viewed as the cost of generating site traffic. Eighteen in-house sites in May generated a minimum of eighty sales per day with the average order ticket running at $48.00. The company's traffic costs then, on average, were recorded at a 1:12 ratio. We call this the "Internet Heat Factor" ratio. Other B-2-C companies call it the death spiral ratio, coming in at $100 per $50 of sales or 2:1. In other words, it really doesn't matter if they generate $500,000 in sales per day if their heat factor ratio is greater than one (i.e. - no wonder they don't make any money - duh)!
We expect CraftClick.com, Inc. to turn a profit in the fourth quarter of the current fiscal year, ending March. This is quite a feat, given they have only been around since last September. Although the company only generated $298,000 in revenues for the second quarter, we expect the run rate to double in the third and fourth quarters. In addition, $0.05 of the second quarter's loss of $0.09 was attributed to professional fees (i.e. M&A, investor relations, etc.), and overall G&A expenses should start to flatten out as a percent of sales. Sometimes big surprises come in little packages. Buy on the rumor - keep buying on the fundamentals!
The bottom floor is moving up fast don't miss this opportunity!!!
Contact: Charles Bingham 713-297-8886
This release is for informational purposes only. It is not an offer to sell or solicit securities or products of any kind. This release may include information that could constitute forward-looking statements made pursuant to the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements may involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. The materials are provided by Stock Communications Group on an "as is" basis. Stock Communications Group has received 26,000 shares of free-trading stock from CTCK and can and will sell and buy it (on the free trading market) at any time. Stock Communications Group expressly disclaims any and all warranties, expressed or implied, including without limitation, warranties of merchantability and fitness for a particular purpose, with respect to the service or any materials and products. In no event shall Stock Communications Group be liable for any direct, indirect, incidental, punitive or consequential damages of any kind whatsoever with respect to the service, the materials and the products |
