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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: chester lee who wrote (1219)	6/22/1998 2:58:00 AM
From: chester lee	Respond to of 2506

Let's try that last post again. It appears that I couldn't get all my typing done in the allowable 15 min edit time limit. Below is the intended post. ACTM and HPRT were my 2 top picks from the list. My criteria's were simple: chart formations, net negative eps, market cap, average daily volume and gut feeling. I choose ACTM over HPRT because of ACTM's industry over HPRT. HPRT may surprise us with a good report of something working better than expected, a new device, another patent on another surgical technique, or something that may spike the price. I can not see ACTM announcing any type of "surprise news". ACTM will have to turn its business around to do better, which isn't easy or they would have done so already. I jumped before I did full due dilly, and took a small short position just to stimulate my interest. Let the research begin! quicken.elogic.com Look at the balance sheet from the above link. Sorry, I could not copy it in any legible format. Balance Sheet highlights 96 to 97'. Property and Equipment, Net: went up 5mm Current Liabilities: Doubled from 31mm to 63mm Bonds: The value decreased from 29mm to 730K Total Revenues: increased roughly 40mm (226mm to 265mm) Cost of Sales: increased 55mm (198mm to 253mm) <------ 15mm more than sales growth. Looking down further into the quarterly information, we see some disturbing signs with receivables. Receivables from 3/97 to 3/98 have gone down by 5mm. Allowances have gone up from 225K (3/97) to 2mm (3/98). I guess more than one customer is stiffing them. They must be recording increased activity in the 60 and 90 days late payments. Noticed their current liabilities also increased greatly in the last 6 months (31.8mm 3/97, 38.5mm 9/97, 71.1mm 3/98), almost 40mm in new liabilities. Me thinks they are experiencing a cash crunch, and is trying their best to stretch their process time to before paying their vendors. I wonder how many accounts their are 60 days arrears in? ACTM's only positive is their trend in interest expense. I don't know what to make of it yet. My guess is that the interest expense was due to a ST debt they ran up, but was able to pay some off. This is probably related to the large (32mm) liabilities run up over the same period. chester