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Microcap & Penny Stocks : CSHK CASHCO MANAGEMENT Y2K -- Ignore unavailable to you. Want to Upgrade?

To: topstock who wrote (5551)	9/5/1998 12:40:00 PM
From: JOE TURMAINE	Read Replies (1) \| Respond to of 7491

topstock, here is S4T take on the ARB spinoff. CASHCO MANAGEMENT (CSHK) $.22 on 441,000 shares. I got so many questions on Cashco's news of a spinoff, that I will try to explain it again. First of all the reasoning behind doing the spinoff is to allow both divisions, which have widely varied interests, to focus on their core business. Cashco will remain in the software and other technically driven products and A.R. Brooks will market consumer products. The Company will spin off to shareholders the A. R. Brooks division on the basis of 1 share for every 5 shares of Cashco. The distribution will be to shareholders of record on November 3, 1998. What that means is that for every 5 shares of Cashco that you own, you will receive 1 share of the new stock in A.R. Brooks. The new company will have only 4 million shares outstanding and 2 million shares in the float. A.R. Brooks will market consumer products including the Paws Only brand of cat litter and other consumer products that are currently in negotiations. The Paws Only line of cat litter is now ready to start shipping product. Consevative estimates are for sales of $12 million in the next 12 months, with minimum earnings of $.20 per share. If you only valued the new company at a PE of 10, you have a stock that is worth $2 per share. A higher PE will of course give you a higher stock price. Based on 1 share of A.R. Brooks for each 5 shares of Cashco, if the A.R. Brooks stock is trading at $2.00 each share of Cashco is worth $.40 just in the value of A. R. Brooks. The $.20 per share in earnings for A.R.Brooks equates at a profit of only $800,000 for the next 12 months. That is what A.R. Brooks should make on $5 million in sales. You can see that their numbers are quite conservative. The upside potential is huge. Look for further announcements of large orders from the consumer products division. Cashco's software business, after several missed starting dates, is now shipping product and will be at full production by the end of the month. They are very close to additional large orders including one that could be considered a "company maker". I think you will find that over the next 30-60 days, the Company will be revising the $.03 in earning for the fourth quarter of 1998 substantially higher. The pairing of a high tech company with a comsumer products marketing firm was confusing to investors and lacked any real synergy. You will now have two distinct entities, each with a specific PE multiple. At the date of closing, Cashco shareholders will end up with a share of Cashco (the tech stock) worth at least $.60 based on a 20 PE for the sales already booked with $.03 per share in earnings and 1/5 of a share of the consumer products marketing firm which which based on a mere PE of 10 will be worth $.40 for each share of Cashco owned. That equates to a value of $1.00 for each share of Cashco currently trading at $.22. This is a tremendous value for shareholders and does maximize the shareholder value. This is a term that is used so often and seldom delivered. You can bet that with time other newsletter writers will start to pick up on this story. Trading above $.25 will be a major breakout in the stock and should run to the $.40-.50 area. Look for a short term move to $.50+ and then the next target is $1.00. If you take delivery of your stock the A.R. Brooks stock will be sent right to you instead of your broker.<< JOE