Judy ....You mentioned EFII, for what its worth pl read the foll I recd.
Electronics for Imaging, Inc.
EFII: Nasdaq
Last Trade 12/12/97 $14 7/8
Change -24 1/8 (-61.86%)
Prev Close 39
Volume 32,373,700
Avg Vol 603,909
Div Date Feb 1997
Bid 14 13/16
Ask 14 7/8
Ex-Div Feb 1997
52-week Range 34 - 57 7/8
Earn/Shr 1.56
P/E 25.00
Market Capitalization $2.33B
Shares Outstanding 52.4M
Float 27.8M
Net Income $87.1M
Sales $389.2M
Profit Margin 22%
Return on Assets 26.09%
Return on Equity 32.23%
Fiscal Year End: December
1996 Sales ($ mil.): $298.0
1-Yr. Sales Growth: 56.4%
1996 Net Inc. ($ mil.): $62.2
1-Yr. Net Inc. Growth.: 65.9%
1996 Employees: 354
1-Yr. Employee Growth: 59.5%
Number of brokers recommending as:
Strong Buy 4
Moderate Buy 0
Hold 0
Moderate Sell 0
Strong Sell 0
Average Recommendation (strong buy) 1.00 - 5.00 (strong sell)
This Week 1.0
Last Week 1.0
Change 0.0
Industry: COMP-PERIPH EQP
Ranked 1 of 41
EFII is extremely bullish, with a strong buy recommendation. Tendencies
for prices to begin advancing are extreme at 100%, with a short term
upside potential of $20. An uptrend has emerged and the long-term trend
persistence is rated as oversold with risks limited. On Thursday night's
disappointing news, the stock at $39 was downgraded by Prudential
Securities to hold from buy. But Prudential's Alexander Henderson
changed his mind after the stock fell to $15, and raised his rating to
buy, saying the selling was overdone. Others are beginning to agree. The
price will zoom very quickly. Theortically, it could bounce back to the
low $20's before resuming, it's a decent 35% bounce seems to happen when
the fundamentals haven't changed.
For stocks investors, place an order to buy EFII at a limit price of
$15.50
For options traders, place an order to buy EFFI Jan 10 call (EFQAB) at a
limit price of $1.50
Friday's trading with such high volume indicated to me that the bottom
in the price has already hit, and some recovery is in order. Secondly
the options contracts traded, also showed a higher number of Jan 15,
17.5 and 20 (most heavily traded contract). This is a bullish indicator
for the short-term. The company eluded to the fact that it may consider
a share buyback plan. EFII has around $250 Million in the bank, so it
would not be difficult to do. We will not be surprised to see some big
insiders buying too. This alone would boost the price substantially. We
see solid appreciation from here.
This stock has just experienced an overdone selling as an effect of
general market feeling, a classic overreaction. It closed down nearly
$25 a share or 61%. If you go back just 10 days the stock has fall from
51 or 73%. This is quite a fall. And if you take a look at the 100-week
EFII chart, two years of gains wiped out in one day! The question is
does the company deserve such a drop? Earnings are going to come in at
about 50% less than expected. That is bad without a doubt, but should
the price of the stock drop 73% in the light of that news? Investors
certainly seems to have thought so, or did they? Well the stock was
large held by institutions who dumped the stock to salvage what the
could in their portfolios. It looks pretty bad to be holding a stock
that is down 60-70% at the end of the year. The small guy was left
holding the bag. I call this a temporary setback. A year from now this
Company would be trading at $30.
After studying this company in some detail, it seems very strong, with
excellent market/industry position, including good branding. EFII has a
value of $30.00 per share. I must say that after checking the continuing
financials, this looks like a great company. EFII is a strong industry
leader. This stock is extremely undervalued. We should expect a strong
move to mid 20s soon. EFII has well above average safety with well above
average upside potential. It reflects that EFII is likely to give well
above average, quite consistent returns over the long term. If you're
looking to buy stocks with low risk & high reward stocks, this is the
one for you. Many are going to consider buying technology issues at
these reduced valuations. Portfolio managers are going to have to
purchase stocks they believe will perform nicely next year. All the
analysts agree that the this stock will be back to normal in 3-6 months.
Probably an easy double in that time frame. This stock will be in mid
$20s by the end of this year.
If you carefully look at EFII past earnings reports you will see a
company with very little overhead which presents it as a well manages
company. Up until this fiasco we were looking at a company generating
$800,000 to $1 million in revenue per employee. We don't have to look at
any painful restructuring layoff and all of this kind of thing that goes
on when a company is undergoing a transition. Almost every company that
depends on resellers has had to undergo some sort of inventory
adjustment at some point. The big question is the new products. After
looking at 21 consecutive quarters of beating estimates and 25 quarters
of year over year revenue growth; the company's business model has to be
sound.
EFII's CEO Avida said he is still confident about the company's
longer-term prospects once the economic trouble in Asia clears up, as it
must inevitably do at some point. "We have a pipeline full of new
products and we are confident in our strategy and our relationships with
customers," he said. EFII has multiple new design wins that will be
introduced in 1998, starting with Q1. These new machines are 3 to 6 time
faster than the current machines, and will be sold at the same price.
Arthur J. Bonnel, manager of Bonnel Growth Fund and a one-time holder of
the stock, says the action in EFI is overdone. "I think the Street is
acting irrationally and selling in a frenzy," he says. "It's a great
buying opportunity. I'm confident that long-term investors will do very
well."
Electronics for Imaging (EFI) designs computer hardware and software for
color desktop publishing. Its products link computer networks to a color
copier, allowing users to create high-quality color documents in their
offices. EFI's Fiery line of products includes scanable color servers,
which serve both the low and high ends of the color printing market, and
color controllers, which are integrated into desktop color printers to
facilitate color printing. The company's products, marketed with the
"Fiery Driven" logo, are sold to original equipment manufacturers such
as Canon, Kodak, and Xerox and to dealers. For the nine months ended
9/97, revenues rose 44% to $299 million. Net income rose 59% to $67
million. Revenues benefited from higher sales of Fiery XJ and Fiery XJ
products. Earnings also reflect the Company's ongoing manufacturing
savings efforts.
2855 Campus Dr.
San Mateo, CA 94403
Phone: 650-286-8600
Fax: 650-286-8544
efi.com
After discussions today with the total of 4 analysts that cover EFII, we
are more sure than ever that the company is doing great:
1) EFII has over 10 design wins that they will start announcing by late
December and early next year.
2) The stocks of all of EFII's OEMs are appreciating recently. E.G.
Xerox, Canon, Minolta. This should give us good indication about EFII's
business.
3) Insiders have not sold any shares recently and still have a nice
position in the company ownership. They know the future is bright.
4) EFII has just bought a new and bigger facility to move into.
Obviously, they have expansion in mind.
5) EFII's management is now traveling in several countries overseas,
promoting business and signing new
contracts.
6) The analysts feel that the stock could only reach a bottom of $30.00,
and at its current price of $14 7/8 it should start appreciate from
here.
What people are saying about EFII on the internet:
"The stock is way oversold. It is hard that the stock price will decline
further."
"It's got to look like a good buy now. I mean if they were liking it at
50+ you gotta love it now!!!! Jump in..."
"Accumulating as much as EFII as you can. We expect a price target of
$35-40 within 12 months."
"We should expect a strong move to mid 20s soon. I am buying..and have a
lot of EFII. As always.. do your own research."
"It is also clear that the stock price will not stay below $15 for long"
"I agree that EFII is a great buy at these prices. I have friends who
work for suppliers of EFII and they have been placing orders like crazy
lately. It looks like their business volume is definitely increasing. I
am long on EFII..."
"After discussions today with the total of 4 analysts that cover EFII,
we are more sure than ever that the
company is doing great."
"Starting on 12/12/97 we are going to load the boat with EFII."
"EFII will bounce back at least 4 points any time soon."
"My buy order this morning was the fastest thing I've ever done in my
entire life"
"As a long term investor this stock at current price is a great
investment I expect the stock to trade around $25 by the end of January
buy below $16 and you will double your money within a year."
"The concept buy low and sell high clearly applies to this situation.
Buy now (since its low) and sell high later."
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Best wishes as always
Burjis |
