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Microcap & Penny Stocks : Rocky Mountain Int'l (OTC:RMIL former OTC:OVIS) -- Ignore unavailable to you. Want to Upgrade?

To: Joe Master who wrote (51050)	8/7/1998 11:28:00 AM
From: bmart	Read Replies (1) \| Respond to of 55532

Mr. Master, A very fine morning to you sir! Likely the idea Mr. Martin was trying to convey with his hyperlink was to inform us of potential scams. I used an arbitrary company, a 'bottled water' company to demonstrate the merit of Mr. Martin's link. There are scoundrels, as Mr. Martin can attest to , who will is to try to suck the uninformed into buying into their promoted 'bottled water company. I used the Lanza's out of Indian Wells , Calif. as an example. With all that hype they could pump the price up; then short it down to nothing, then badger and lament about what a bad idea it was in the first place. The water business is very low profit since there is so much competition. For example to entice shoppers, a Safeway store in my town reduced the bottled water price from $1.09 to $0.50, which is supposedly their cost. Assume the truck that delivers charges $0.20 per gallon bottle, then the water company gets say $0.30 per gallon. The water company has employees, taxes, facility costs, so for discussion peg their cost at $0.15 per gallon (which might be low) then the profit is something like $0.15 per gallon. Now at a PE of 20 ,they need to earn a nickel a share to justify a $1.00 stock price. Assuming there are 5 million shares (a reasonable guess), the $1.00 price implies earning $250,000 which means 250,000/0.15 = 1.67 million gallons must be sold. So to "go to the moon" they need to sell approx. 10 million gallons of water! Also they may have to squeeze profits initially since at this point in time one already has several brands to choose from, perhaps one would try a certain brand of bottled water if the price was lower than other water choices. In essence, Mr. Martin provided us a service and I was applauding that. Good day RB