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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Judy who wrote (11629)	7/9/1998 8:46:00 PM
From: Sonki	Respond to of 42787

great TA FA on smtk ? 18 to 40 ? but what the hDIK? big deal. quote.yahoo.com quote.yahoo.com SMARTALK CS First Boston analyst Frank Governali walks away from a meeting management even more convinced that Smartalk is a tremendously undervalued stock. Based on the analyst's comments, it is hard to make a case for not owning the shares of the prepaid calling card co mpany: extremely strong management team in place; industry growth robust; no unusual competition on the horiz on; new products and contracts expected to deliver strong returns. Given that Smartalk's outlook is so ros y, Mr. Governali believes that there is no reason why SMTK shares should not trade at $32 by the end of the y ear (up 98%). History: Smartalk was one of the hottest stocks going, advancing almost 150% between August of 1 997 and March of 1998. In April, however, the company hit a snag in operations, warning that reclassificat ion of certain revenues, delays/costs associated with the launch of alternative distribution, and costs assoc iated with the anticipated launch of prepaid cellular and international expansion would lead to a loss of $0.05 a sha re for the quarter. At the time, Wall Street had expected the company to report a profit of $0.05. The warning se nt SMTK spiralling 8 11/16 pts lower to 22 7/16. Salmon Smith Barney analyst Jack Grubman cut estimates the da y of the warning (FY98 from $1.28 to $0.82 and FY99 from $2.10 to $1.81), but maintained his "buy" rating. He f urther commented that the sharp retreat in the stock that day was a very attractive buying opportunity, as he believed the stock would rebound to $40 per share. now 18. A First Call survey of 3 analysts calls fo r SMTK to earn $0.83 (P/E 19.5) this year and $1.83 (P/E 8.81) in 1999. Both P/E ratios are well below the 40% annual earnings growth rate that analysts predict the company will average over the next five years.