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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Roger Louis who wrote (6273)	1/2/1998 9:32:00 AM
From: Herm	Read Replies (1) \| Respond to of 14162

Hi Roger, NASDAQ: (CLST : $20)$578 million Market Cap at December 31, 1997. Trades at a 36% Discount PE Multiple of 11.2 X, vs. the 17.5 X average multiple at which the Retailers of Electronics & Computers SubIndustry is priced. Next earnings release is due out Feb. 02, 1998 and has the strongest analysis recommendation of 1 according to Zach's. There has been a MAJOR insider sell off of shares by the CEOs in the last part of the year. For good reasons! The company has a SIGNIFICANT percentage of it's assets in the Asian based countries. The SEC #S-3 registration form filed on Dec. 03, 1997 spells out the risk! This is a must read for EVERTBODY! sec.gov In summary, the S-3 has provisions for the lending offshore group to be able to cash out by issuing more stock/generating more stock shares at predetermined price. Of course, should that occur (because the CLST business going down the tubes) that would mean more float (hanging rope) and that could further depress the stock prices! You have to ask yourself why would CLST go to the offshore loan sharks for operating cash? Also, why American banks would not take on CLST as a risk? Too much of a good thing can kill you! Excessive uncontrolled growth included. Considering all the factors Roger, I would become very aggressive and try to CC ride my way out by going in the money! I would also buy LEAPs PUTs with the CC premies. Short interest increased by 16% from Nov. to Dec. 15, 1997 to 3,673,104 shares or 3.78 days (970,690 avg./day)worth of short squeeze. Of course, CLST will have to generate either higher earnings or something fantastic to overcome the Asian Flu scare that now exist in the markets. Thus, in my opinion the shorts may have an easier time beating down the stock to $10 even if CLST does not deserve it! Also, you know they will buy up shares and start the stampede when it suits them! You can either go for the ride or try to cash out using the CC premies.