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Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services -- Ignore unavailable to you. Want to Upgrade?

To: Little Engine who wrote (1519)	1/16/1998 8:02:00 PM
From: Richard V Davis	Read Replies (1) \| Respond to of 27968

To respond to your points: 1: I have not asked you to take my word. I do not know if you are implying that I did. I certainly would never suggest that anyone take my word for anything in respect to an investment decision. 2: I weighed in because I have some concrete knowledge of the placement industry in NYC. I believe I have covered it in previous posts. 3: In terms of permanent placement, the income/expense ratio can quite easily be over 90%. I know a fellow who operates his own one man placement firm and I know his numbers. I'll give you an approximation. The approximation is in the even numbers, ratios are accurate. Firm X places 40 individuals at an avg wage of 80,000 $ 3,200,000 Firm X earns 25% of one year's salary $ 800,000 Firm X has expense of $ 45,000 per year $ 45,000- Firm X Net income after expenses $ 765,000 Firm X Profit margin on gross income=765,000/865,000 95.63% I can not tell you what percentage of FAMH's income comes from perm placements. I do not have the slightest idea of the ratio on temps. If you pull out your calculator you can see that every perm placement hits the bottom line much harder than a temp placement. I do note that Ira's reported comment is "normal margin is 85/15 temp/perm". I speculate that FAMH may have had a much larger percentage of perms in the partuclar quarter in question. While you correctly note that the bulk of expense is in temps the bulk of net profit is in perm placement. Temps allow the company to get in the door of an employer, perms make the stockholders smile I am not suggesting that FAMH has earned the numbers quoted on the thread. My strategy is to consider the amount of money I have invested as being equal to a blackjack bet in a casino. Until I see audited financials my FAMH earnings estimate is not $ 1 or $2 million; my estimate is that they have had net profit of zero. I invest on the merits of the company, the industry and personal knowledge. Sorry to be so long winded. You asked for information on ratios in this business; the numbers I gave you are accurate. The ratios are real. As volume of perm placements goes up, the ratio grows as well. Understand this about the perm placement field: It costs almost the same overhead amount to place 10 people or 100. I am sure, as you show that you can think, that you can see the potential. Potential is what BB investors are buying not equity. Rick