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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (8747)	5/14/1998 12:38:00 AM
From: Bill Wexler	Read Replies (1) \| Respond to of 18691

Another interesting short idea - Sturm Ruger (NYSE:RGR) Ruger is a gun manufacturer. Over the past few years, its gun business has been slowly eroding and the company has derived a greater percentage of its revenue from its titanium casting business. It's main product is the titanium golf club head for Callaway "Big Bertha" clubs. Judging from Callaway's recent collapse (the golf business has gone to hell in Asia), I would guess that orders for the club heads have slowed down and inventories are piling up. I also think that the downtrend in gun sales will continue. Last Q, RGR missed earnings by 12%. I figure they're going to disappoint when they report in June. The risk here is the relatively hefty dividend payout (about 4%). However, I still think that the stock will drift down to the mid-teens - if not lower. Nearly zero risk of an upside surprise and volatility is very low.

To: Roger A. Babb who wrote (8747)	5/14/1998 4:27:00 AM
From: Dale Baker	Respond to of 18691

Bloomberg's take on CFON. It will be a good short again soon: Shares of the Wilmington, North Carolina-based company rose 6 15/16 to 9 3/4 in trading of 23 million, the second most-active stock in U.S. markets. That's more than four times its 5.34 million shares outstanding. Analysts attributed the rise to investor hunger for stocks whose sales are linked to the Internet. ''Investors don't fully understand the market -- when they hear the word 'Internet' they jump in,'' said William Blair analyst Abhishek Gami. C-Phone hasn't set a price for the Internet box, doesn't know when it will be available or how it will be distributed, said Bill Karr, corporate counsel. It will compete with Microsoft Corp.'s WebTV products and service for customers. C-Phone makes equipment that allows people to see the person they're talking to on the other end of a phone line. The company lost money since it went public in 1994. Its loss for the nine months ended Nov. 30 more than doubled to $4.45 million, or 86 cents a share. The company's largest customer, Nobody Beats the Wiz, went bankrupt in December and hasn't paid its bills, causing C-Phone to write off its sales to the electronics retailer. The Wiz provided 22.5 percent of C-Phone's revenue. Another C-Phone customer, Topix Innovation Gallery of Los Angeles, stopped carrying its video phones this week because ''the quality was not satisfactory to us,'' said Alex Elnek, vice president of marketing. A total of 45 percent of C-Phone's videophones were returned by customers.