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Microcap & Penny Stocks : DGIV -- Good Prospects? -- Ignore unavailable to you. Want to Upgrade?

To: Secret_Agent_Man who wrote (4470)	4/16/1998 12:03:00 PM
From: Richard B. Haenisch	Read Replies (1) \| Respond to of 7703

UPDATE !! 11:59 EST Bid 5 11/16 Ask 5 23/32 TTL Vol 765,200 20,200 BUYS 19,000 SELLS RICO

To: Secret_Agent_Man who wrote (4470)	4/16/1998 12:07:00 PM
From: dwlima	Read Replies (3) \| Respond to of 7703

it does not matter. here is the deal. est. 1998 revenues = $30M 1999 revs = 66M 2000 revs = 145M 2001 revs = 319M 2002 revs = 700M 2003 and on = NO growth this assumes a compunded annual growth rate of 120% for 5 years...much, much less than chin's expectation....only $700M in 2002. to be honest, i think we will blow past these numbers in our $600 billion industry. i think we may have 60M this year to be honest. i just got wind of new contracts being signed. assume gross margin of 10% (less than their 15% now) profits 1998 = 3M 1999 = 6.6M 2000 = 14.5 2001 = 31.9 2002 = 70 etc. assume a beta of 1.5 (risky stock), the expected return for shareholders would then be approxiately 15% so, we discount the above numbers at 15% and we have: arrive at a total of $80M. amazing how this high discount rate knocks down those numbers we also have a perpetuity at 2002 of 70M profit with some growth rate. with no growth and just $70M in cashflow each year, that would be worth (70/.15)/(1.15)^5 = 230M so, with a 120% growth rate for a few years and no growth..we have $310M. this divided by 18M shares (i am not exactly sure how many there are, but this is close),we have a $17 stock price NOW...TODAY!!! You can check this info. with any analyst. with big contracts we are heading up to $20 or so. $100 is not that far away...as i can tell you that even a 5% long-term growth rate will equate to another $800M in value or $45 in additional stock appreciation this is not a joke. take this to your broker and ask to speak with a house analyst. this is why amzn and yhoo are trading where they are. it is a bit more complicated, but this is roughly how it works. this assumes capital investments and debt servicing are above our 10% margin. in the real spreadsheet i will do, we will see everything...debt, tax shield derived from debt, investment estimates, etc. dwlima