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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ken W who wrote (21373)	10/15/2000 12:20:38 PM
From: arnold silver	Read Replies (2) \| Respond to of 29382

Hi Amigos, I am still lurking and catch all the posts. I think you guys are somewhat familiar with ECGI it recently got its nasd listing still in the toronto exchange. It is in the advertising business and has a lot of biggies for customers.ie wallmart etc. Made Merrill Lynch their financial banker this week, have several Canadian analysts looking for better than $10 stock is trading at $5 now.I think sales are up 50% from last year.Is profitable now. Check it out I think you will like it. Arnie Stone, Syndicated Columnist The Mark Stone Report: Envoy Gets the Best! Miami, FL, October 11 /SHfn/ -- Despite how the NASDAQ has turned investors into a fresh, new entrée of road kill in less than 40 days, Envoy Communications Group [ECGI] [T.ECG] continues to behave as if this were last March. In fact, this integrated e-marketing communication services company (read: Old Economy advertising agency marries New Economy digital) is now trading higher than it was during its lowest points last March or April, but still off its highs by around 20%. Technically, we like the rising monthly exponential moving average lines. Fundamentally, we are excited about the Merrill Lynch news release. Canadian-headquartered Envoy, with offices in New York, London, Paris and Toronto, hopes to receive U.S. and international exposure through this relationship. The key phrase of Tuesday's release was "lead financial advisor." Another relevant item noted the team was "led by the top-rated analyst in our category according to Institutional Investor." These are probably hints that the Envoy work-of-art is still in progress. On the face of it, it's just another dynamic Canadian company hiring yet another U.S. investment banking firm. But, why would Merrill Lynch bring an enhanced credibility to the Envoy story by lending out its name? Probably became there is some big acquisition in the works, in which ML could be useful in analyzing or helping to underwrite. Genovese added, "Merrill Lynch gives us credibility, exposure and the expertise in helping us make a large acquisition." We had a brief telephone conversation with CEO Geoff Genovese, after Tuesday's market, who (amazingly!) was on his way to a function with his new friends at Merrill Lynch. We hammered away as to whether this relationship was about an upcoming acquisition. Genovese told The Mark Stone Report, "I can't comment at this time," and added, "There are a lot of exciting opportunities that we continue to look at. We look forward to growing the business and are working on some large opportunities. Merrill Lynch gives us credibility, exposure and the expertise in helping us make a large acquisition. We believe this opportunity with Merrill Lynch gives us that." Lots of talk without giving away the secret, huh? Asked about why ML would do business with a small company like Envoy, Genovese responded, "This is a great endorsement that Envoy is on the international scene. They obviously recognize that or wouldn't have proceeded with us." Translation: The deal is probably a blockbuster that requires a team that only a handful of major brokerage firms are equipped to offer in order to properly evaluate such an acquisition. We continue to strongly believe in a high likelihood of near-term analyst coverage from major investment banking firms as a result of this relationship. That's plural and it doesn't necessarily mean "only Merrill," or being a cautious soul, "or Merrill at all." A glimpse of favorable coverage came last week with the Griffiths, McBurney & Partners (GMP) "buy" recommendation, along with commentary, a price target of C$12 a share, and financial projections through FY2002. That C$12 price target was disclaimed with the possibility of an upward revision in target price, subject to a "recovery in the valuations of e-service providers." Perhaps that C$12 price target might materialize sooner than we think. Envoy's third-quarter financials, reported August 28, continue to show double-digit quarterly growth, with EBITDA up by 55% over the comparable quarter a year ago, and higher by 45% for the first nine months compared to the year-earlier period. According to the GMP report, Envoy won't cross the C$300 million threshold until FY2002 with gross margins finally above the vital C$100 million level. Before then, all current acquisitions will have been digested. But, none of these projections include whatever deal Envoy is cooking up with Merrill Lynch, if that is the case. Ah, to have been a fly on the wall at whatever function Genovese attended Tuesday evening. Perhaps that C$12 price target might materialize sooner than we think. It's a potential reward of 50% to the upside versus the small risk of another 10% to 15% downside. In the current market those aren't bad terms. © 2000 by The Mark Stone Report. The Mark Stone