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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange) -- Ignore unavailable to you. Want to Upgrade?

To: Sparky Beardslee who wrote (1610)	2/7/1998 10:14:00 AM
From: Mark Dorros	Read Replies (1) \| Respond to of 2841

<<I don't know how McGinnis, or any officer can make any clear definitive est. so early in their year.>> I agree. I don't think Michael's opinion of the importance of meeting the $1.20 figure is unanimous. Especially since First Call has $1.16 and Zacks (incorrectly) has $1.06. I believe I first heard McGinnis estimate $1.20 some time around August of 96. The company has held to that number all along (via McGinnis on numerous occasions and IR when asked). But there has been a lot of discussion (on AOL especially) regarding the makeup of the $1.20 and whether $1.20 reported is really equivalent to $1.20 earned from continuing operations. The reported 1997 figure will include the one time arbitration award, and the sale of a couple of subsidiaries. However, it will also include the unexpected dilution from the debentures. So we have a few unexpected events that kind of balance each other out, leaving a good chance to make the $1.20 for the year. I think the important thing is Eco's earnings per share growth rate and the likelihood of continued EPS growth - and the company's valuation relative to that expected forward growth. Much, much less important to me is whether Eco can meet an EPS number that was estimated over a year in advance. Regarding Eco disappointing... I'd also like to point out that the general market conditions and the performance of Eco's industry group and related groups just after 3Q97 earnings were announced also had, IMHO, a major effect on the price. The slide from just under 15 to below 9 was not entirely due to $0.28 vs $0.30. Stocks do not trade in a vacuum. Many other stocks in Eco's group have similar looking charts. Mark

To: Sparky Beardslee who wrote (1610)	2/7/1998 10:33:00 AM
From: david james	Read Replies (2) \| Respond to of 2841

Sparky, I'm a bit confused by your comment that Zacks has increased its rating on Eco and has no estimate for the year. quote.yahoo.com I believe this info comes from Zacks, and shows that $1.06 yearly estimate. They also show the two strong buys that have been there for a while. Is there a different version of Zacks somewhere? I agree with you with regards to your comments that its likely that a lot of the recent movement is related to DBCO. I believe the uncertainty is keeping a lid on the typical run towards earnings - especially earnings with the incredible growth expected. What people want to see is that the DBCO buyout (if it happens) will not slow the expected growth into 1998 and 1999. In Eco's last acquisition (Chempower), the use of floorless convertible debentures was damaging in the short term. McGinnis will NOT use this method again, but I believe a lot of potential investors want to see that for certain. The movement on Friday morning was quite interesting. The spread was bouncing all over before the open and moved up to 12 1/8 on volume of only 5k. I think the potential of the DBCO announcement was the cause of this and it faded back when no announcement came. I think this suggests that we are likely to see some major buying come in once it is announced - hopefully next week. I think all this press in the Financial Post is certainly putting a lot of eyes on this acquisition. If its done right, we are off to the races. $93 mill? Hmmmm. I wonder if that includes the Sanda cash and added shares. David