Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Ames Department Stores (AMES) -- Ignore unavailable to you. Want to Upgrade?

To: RBattman who wrote (982)	2/28/1998 5:30:00 PM
From: Arthur Tang	Read Replies (1) \| Respond to of 1911

Thank you, Mr. Battman. You are most observant of all the details. However, once you are over the breakeven point; the company gains every penny of sales over cost as profit; because overhead is all paid for. So, January sales which is good will have more profits than the rest of the year, by at least the overhead which was paid for. Efficiency and product mix, show up in gross margin. A 0.7% increase in gross margin of revenue of $2.2 billion is a $15.4 million increase. We are looking for a "peaking out" of ultimately 3.0% increase over 26.5% gross margin when they first start to make money. Balance sheet is clean and properly reserved even for leases over the life time of the lease. P/E ratio is a problem because of technical pull back. Short interest of 813,000 shares are slowly averaging up to $16/share from last year of 750,000 shares at $10/share. That is why it is stuck at below $16/share. Until the market maker buys back the short interest; price will be a struggle. But the company will march on to better performance. AMES can not be interested in revenue growth until they have efficiency, traffic, and steady profits for a few years. Growth will then come from more store openings and E-commerce experiments.