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Non-Tech : RECY Looking Good... A -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (5931)	10/2/1998 1:56:00 PM
From: Siber	Read Replies (2) \| Respond to of 7006

It is not the international steel dumping that is the problem. Most of RECY scrap is going to the electric arc furnaces of the east coast. There may be some dumping but not that much that is going to effect the users of RECY's scrap. Second, earnings have not increased substantially as some would say, revenues have increased. This increase has been from the acquisitions that RECY has made over the last year. Problem is, they are out of money for anymore acquisitions, will probably default again on the loan agreement, and it is questionable whether they can prevent defaulting on some of their junk bonds out there at 13%. Further, BDO Seidman, there CPA firm has resigned, big question is why? There is some who believe that there is a disagreement over accounting procedures used to value inventory and assets from acquisitions, although I have heard that the company has denied this. Also, the company does not report timely on their financial results, expected yearend report for 9/30/98 is not due out until sometime in December. IMHO, I would expect to see a loss of .05 to .07 cents a share for the fourth quarter if not more. And I doubt that EBITDA would be sufficient to cover interest cost. Additional loss could result from inventories which have been valued at higher values than what the current scrap prices are. Generally accepted accounting principles would require inventory to be priced at cost or market which ever is lower. The viability of this company is greatly in doubt. Even the technical analysis indicates that there is more down side to this company. If you look at research on this company you find that those following the company are lowering their ratings. All in all, I would be very dubious of putting good money into this company. Remember, investing without research is just gambling and I think your odds would be better in Las Vegas. John