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Microcap & Penny Stocks : All American Semiconductor (semi) -- Ignore unavailable to you. Want to Upgrade?

To: NAG1 who wrote (510)	2/22/1998 2:38:00 PM
From: jeffbas	Respond to of 952

First place, IBD is wrong. there were no charges in 1997. The company was clean every quarter, making .02, .03, .06, .06, for a total of $.17, fully taxed. The stock is selling for a low price relative to its sales and current $.24 earnings run rate for two reasons. Mgmt made some mistakes in the 1995-1996 time frame which caused some writeoffs in 1996 - it takes a while to restore credibility. Second, they have a lot of debt relative to equity as compared with their peers. This means a given amount of sales can make less earnings for them than for someone else with less debt, because of extra interest charges. However, distributors are typically cash generators and their debt has been coming down and should continue to do so (unless sales surge - good - and they need more working capital to support them). I expect them to do $.25-.30 this year and hit a price of $3 or more as confidence increases. They are a national distributor with excess capacity in place, have already added two new companies to their lines this year, will probably add more, and are very well positioned among the players their size.

To: NAG1 who wrote (510)	2/22/1998 5:44:00 PM
From: Arthur Tang	Read Replies (1) \| Respond to of 952

Thank you, Neal. Each one of us believe there is an intrinsic value to a company. Some, book value. Some, earnings per share just reported. Some, also the future earnings per share next quarter. Some, adjusted with the overhanging problems, lawsuits and such, if they are in the annual reports. Some, free cash per share or real estate or inventory hidden values. Others, just like the name, some good will if you will. In the case of SEMI, market making touched $2.5/share and had to pull back to buy back borrowed shares. Losers just turned around, has a problem of valuation so low that market makers can not move them into proper valuation without overbought problem. Fortunately, short interest is very small, and with careful moves; SEMI will soon achieve the proper earnings valuation. SEMI now uses a conservative accounting procedure. Apparently, write off on inventory is current. Jeff Bash, still disagrees; thinking reports are erroneous. In the annual report, we will know. No matter. A company that keeps inventory current, is a company that may have hidden value, if SEMI ever recovers the written off assets. Most company management thinks market makers' abilities to create a market is the reason for low valuation. And they are, for the most part, correct. The number of stockholders are definitely an indication. If market makers distribute in round lots; 20 million shares would have 100,000 stockholders. In fact some companies only have a few thousand or less stockholders, making the market a very thin one. Stock prices suffered, may continue to suffer.