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Microcap & Penny Stocks : ACRT about to move to new highs -- Ignore unavailable to you. Want to Upgrade?

To: Randall Rosen who wrote (2156)	3/4/1998 4:40:00 PM
From: Joe Hoek	Read Replies (2) \| Respond to of 7054

Seems he has postponed it for some reason. Ask Pink directly.

To: Randall Rosen who wrote (2156)	3/4/1998 4:41:00 PM
From: Goulds	Read Replies (1) \| Respond to of 7054

Subj: My analysis of ACRT By: delkil Date: Mar 4 1998 12:44 P.M PST Reply To: Msg. 1848 by BOBROUSE9250 Hi all - this is a little long, but I wanted to post why I am long using facts and analysis. I like to buy stocks that are "fallen angels" -- companies who have had proven track records in the past, but have stumbled. I like companies that have been sold off, preferably in herd or panic selling. SRSL and PERI aretwo good examples. I look for no debt and a lot of cash to help with the turnaround. I first check to find out why the stock has dropped. From a value perspective, ACRT is a great buy because unlike the companies I usually buy, it has been sold off for no factual reason, other than it was a bit overvalued in the high 20s. THINK. There has been no news which has caused this selloff -- only rumors and short selling. Has any short seller on this board posted a factual reason for the price decline? I then like to get an idea ACRT's business. I first noticed ACRT when my Dad, who owns a small business read II's article on them and said that TADs would solve the perennial problem he has with deadbeats. I ran the numbers in late December, saw the high PE, and passed on the stock at around 27 I think. It seemed like a great idea I had missed out on. But sometimes you get a second chance. I'm a lot more interested in ACRT with a 30 P/E than a 60. Next step is the balance sheet. ACRT's is stellar. No debt and lots of cash. Earnings and Revenues have increased without a beat every year. I don't like the recent secondary offering, but hey, you can't have everything. I usually like margins to be a bit higher too. Most importantly though, I calculate the PEG. This is an important ratio for both Peter Lynch and the Motley Fools. The idea is that a fairly valued stock's P/E should roughly equal its growth rate, so a stock with a 30 P/E and a 30% growth rate would have a PEG of 1. Anything under 1 is undervalued, over 1 is overvalued. Growth rate: with 3 year earnings of .28, .55 & .85 the growth rate is 74%. (SQRT Y3/Y1)-1 P/E is 27 PEG is .36, putting ACRT in the extremely undervalued range. Even with a growth rate of 50%, ACRT has a peg of .54, still undervalued. I then set a price target which will tell me when the market has recovered its senses. For that I simply multiply the growth rate of 74% by trailing earnings of .42 a share. With a 74% growth rate price target is: $31.08 With a 50% growth rate price target is: $21.00 The future? Since I believe the drop is solely due to rumors generated by short sellers, I buy in at 12 and wait for them to take their profits. From there I will wait until ACRT hits the high teens and then re-evaluate. Just my thinking. delkil