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Non-Tech : RECY Looking Good... A -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (5271)	7/8/1998 2:47:00 PM
From: Wally Mastroly	Read Replies (2) \| Respond to of 7006

Jim, Steel makers impacted by the GM strike. Hopefully no big affect on RECY: biz.yahoo.com Wally M.

To: James Strauss who wrote (5271)	7/15/1998 1:29:00 PM
From: James Strauss	Read Replies (1) \| Respond to of 7006

Gang: Thanks for the kind words... It's nice to see RECY up 1/4 today... Those that buy the dips continually are rewarded by having their average share price lowered... This becomes more significant as RECY moves into double digits... For those that are holding RECY for the long term, it is important to recognize that RECY will continue to show big Revenue gains Qtr by Qtr... But earnings per share increases may not be as dramatic for the coming Qtrs... The investment in RECY is a bet that Mgmt can make RECY one of the largest Scrap Metal Recyclers in the years to come... In the past three years RECY has grown from 0 to being ranked within the top 5 companies in its industry... This rapid growth comes at a price; expansion costs that weigh on earnings... Investors that understand this industry know that stocks are valued on EBITDA... That's how RECY determines the price it pays for its Acquisitions and that is how RECY would be valued by a company considering a Takeover of RECY... The current EBITDA valuation is between 16.00 to 18.00 per share... So, anyone expecting eps to keep pace with Revenue growth will be disappointed... With that said, analysts stock price estimates run from 10.00 to 18.00... The RECY stock price has grown over 175% in last 12 months... Unless you really understand the valuation process for the Scrap Metal Recycling industry you might be disappointed with earnings in the next few Qtrs... By the year 2000, EPS estimates are for .95 per share... At that point those that only rely on EPS for their stock purchase decisions will be satisfied... When you combine the .95 est EPS in 2000 with the standard EBITDA valuations used in the industry you begin to get a stock price over the 30.00 mark... This is what real long term investing is about... Knowing about a company's Mgmt and how its stock is valued is the key to long term investing success... Jim