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Microcap & Penny Stocks : Cade Industries -- Ignore unavailable to you. Want to Upgrade?

To: Glenn M who wrote (2946)	7/22/1998 12:47:00 PM
From: walt zweifel	Read Replies (3) \| Respond to of 3563

noticed this on the yahoo thread...notice the aerospace remarks..maybe this could explain Is this part of the reason for CADE's lack of fizz! snortimer Jul 22 1998 12:09PM EDT From Motley Fool 7/22 Hexcel Sees Rough Skies Ahead The biggest loser on the New York Exchange this morning was carbon fiber, reinforcement fabrics, and composite materials manufacturer Hexcel Corp. (NYSE:HXL - news) , which dropped $4 15/16 to $19 1/2 after reporting Q2 EPS of $0.46, which was in line with estimates. The materials maker was hurt by an announcement from its chairman and CEO John J. Lee that customer weakness in the commercial satellite, athletic shoe, golf club shaft, and printed circuit board laminate segments could possibly drag down second half revenues by as much as $20 million. As a result, third and fourth quarter fully diluted EPS could be between $0.04 and$0.07 lower -- for each quarter -- than previously expected. Lee also had something to say about the all-important aerospace segment of Hexcel's business, which accounted for almost two-thirds of the company's revenues in 1997. Lee reported that as commercial aerospace deliveries begin to flatten, he expects aleveling off in demand from the firm's principal customers -- Boeing and Airbus. In addition, he stated that the firm now faces the "added challenge of meeting our customers' need for lower cost products, which will allow them to reduce the totalproduction cost of an airplane." Hexcel expects that revenue growth over the nexttwelve months will be more difficult to achieve than it had previously anticipated. Since the lion's share of Hexcel's growth over the last two years has come from aerospace, these announcements have understandably hit the company pretty hard. Taking into account the worst case scenario for the company's second half EPSguidance, but assuming flattish aerospace revenues and steady margins (this quarter marks the seventh consecutive quarter in which gross margins have improved, now at 26% of sales), Hexcel still trades at a modest discount to its 18% lon-term earnings growth rate at 8.2 times forward estimates (adjusted by $0.14 to $1.59 per share for 1998). An extreme degree of pessimism, albeit directly from the mouth of the CEO,has been built into the shares at this level. Investors might want to perform some sensitivity analysis, segment by segment, and take a closer look. Just a thought regards walt