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To: MSB who wrote (52)	7/25/1998 6:54:00 PM
From: Don Pueblo	Respond to of 253

Tough question, MSB. I assume the stock is listed on the NASDAQ, obviously small cap. Without knowing the sector it's in, you are asking a really tough question. Book value can be a tough computation; I believe IRIDF calculates the value of their satellites as part of their value, but satellites are not very liquid; and Boston Chicken used to claim that their contracts were income... the franchise contract (for a million bucks, for example) was counted as a million in income once the contract was signed. Your debt to equity is good, obviously, and the beta is probably high due to the run up, which can be higher than "normal" on a 2 dollar stock. Fonar comes to mind.

To: MSB who wrote (52)	7/25/1998 8:33:00 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 253

MSB, I have no problem if you ask a specific question about a specific stock. What I didn't want to see was people coming over and saying to BUY Mycompany because Mycompany is blah blah blah. Or SHORT Hiscompany because blah blah blah. It's perfectly okay to use specific stocks as an example to illustrate an investment point or guideline. Now to answer your specific questions. By the most popular definitions, this stock is a penny stock (price less than $5 per share) and should therefore become a part of the most speculative portion of your total portfolio, should you choose to buy it. In my personal situation, I limit speculative issues to no more than 10% to 20% of the total portfolio, and that's more than double what most so called experts recommend. Price-to-book is good. Ideally, you'd like to see low ratios in micro caps. You're aware that the price is running slightly ahead of the company's value, so you can monitor that ratio in the event of a financial crisis. ROA and ROE are okay, but are not currently indicative of a rapid growth company assuming that the numbers given are annualized. In small caps or less, most investors are looking for growth companies. I wouldn't be too concerned though, because the company is obviously using their earnings to finance growth, rather than using debt vehicles. That could be by choice or it could be that no lender wants to give them a loan. Not enough information is given to speculate one way or the other. The company is virtually debt-free, I'm not sure what to make of that financial strength current ratio of 3.27 (financial strength ratios are important to the bond market, but I'm not sure of the relevance to the equities market), and the beta of 2.05 is not unusual given the recent run-up in price and that this is a very low priced stock. In order to determine whether or not I'd be interested in it, I'd need to know the sector and the industry and how does this company's numbers compare to the sector/industry as a whole. What is this company's track record? What do their filings look like? Is this a recent IPO? Who are the company officers? What are their backgrounds? Have they had past successes with start-ups? (Are they located in Boca Raton, FL or in-or-near Houston, TX or Nevada [some really big time scams going in those areas]?) And lastly, who is hyping it? KJC