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Strategies & Market Trends : BFT: Will the tulip craze ever break down? -- Ignore unavailable to you. Want to Upgrade?

To: Gordon A. Langston who wrote (275)	4/7/1998 6:47:00 AM
From: Pancho Villa	Read Replies (1) \| Respond to of 650

>Pancho, as I see it and as Cat Lady is implying, if BFT cannot grow their revenues significantly they stand the proverbial "snowball's chance in hell" of producing margins that would justify PE's of 30+. < This is right. Moreover, I anticipate that unless their new ideas work (IMO they won't) their revenues will be flat or even decrease once the artificial transient boost from the accelerated recognition of revenues for financed contracts losses momentum (Let's face it you cannot sell more than 100% of the contracts financed!), also a greater % of uncollectible accounts will affect the bottom line. Add to this that the fact that they have more employees and are spending some money in the business (which IMO will bring much in terms of revenue)and you see further reduced margins. This of course will not happen in a day, but in a period of about two years. Assuming they make the 98 estimate of 40 cents/share, which we know they won't, their current PE is around 80 which is totally ridiculous. Pancho