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Technology Stocks : EN POINTE TECHNOLOGIES (ENPT) -- Ignore unavailable to you. Want to Upgrade?

To: Christopher Brainard who wrote (447)	4/14/1998 12:59:00 PM
From: Rob S.	Respond to of 537

I spoke with Brenda Eames, ENPT's IR, who had spoken with the CEO yesterday. The CEO said that business was going well and that they expected to be within the earnings range of 21c-24c. She said the various street estimates varied around 22c-23c. The 1st quarter of the year is often among the weakest due to inventory adjustments and slack business coming off the 4th quarter. Despite strong business, many other distributors are treading water this quarter. I think that analysts are overly worried about En Pointe's ability to grow the business in the midst of declining prices. From all indications I have seen from individual sales managers and statements from the company, this qtr. is going as well as expected despite the erosion in prices seen industry wide. Overall sales are up in line with expectations. The big question is how much the lowering of prices is effecting margins. From what I can determine, margins will be slightly lower but not nearly to the point reflected in the decline in the stock price. I also asked if the recent acquisition would have an adverse effect on expenses. The on-line biz unit is doing well and assimilation costs are said to be minimal. I expect sales volume to be up about 30% with earnings in the 22c-23c range. Earnings aren't due out until the 28th. I expect some nervousness ahead of the release but think the stock will rebound from here over the days following it. My guess is that we should see 12 soon. I'd give ENPT a strong buy rating. The growth trend should continue over the next few quarters and ENPT is likely to benefit from renewed interest as the effects of seasonality and price erosion become better known. Industry analysts don't expect much of a push from Windows '98. I think this will have a more dramatic impact than expected and will add to an already healthy climate for aggressive distributors. WIN '98 is a much more stable and complete product than was WIN 95. Although the basic look and feel has not changed, Microsoft has done a fairly good job (judging from the beta) of tweaking the product under the hood. The overall effect should be adding a few points to the growth of PC systems and peripherals.