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Microcap & Penny Stocks : The Henley Group, Inc. (HNLY) undervalued growth company -- Ignore unavailable to you. Want to Upgrade?

To: Psycho Killer who wrote (843)	3/12/1998 6:35:00 AM
From: ChrisJP	Respond to of 2232

James, I essentially agree with you. >> One possibility is that Magra isn't charging enough, and in effect is winning business from competitors by selling at a loss. In other words, that we are seeing "profitless growth." Another possibility is that Magra's growth has required addition of people and other expense items that has temporarily outstripped sales growth. A third possibility is that Magra has been undisciplined in its growth, and has incurred unnecessary expenses. << I'm looking at the Dec 31 financial report and the big killer item is this thing called purchases which went from $141K to $476K. From the report, it appear that they only hired 1 more person in 1997. ($15K increase in salaries). So what were these purchases ? Were they one time items or are they directly related to cost of sales ? Their loss for the quarter was $59,000. If they can just cut $50,000 from their cost of sales/expenses, or if their revenues grow even by $100,000 they will be on their way to profitablility. From what I've seen, this will only occur if in fact they have a software product which they sell in addition to their services. More installations of this software product will increase their margin in relation to their expenses. It would be nice to see how many MidSystems installs they have done each quarter and how many are planned. MGRA stock seems to be picking up, a good sign, but I'd like to see it cross $1 on heavy volume. We shall see. Regards, Chris