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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Magnatizer who wrote (10941)	12/2/1998 11:22:00 PM
From: Cary C	Respond to of 29382

David regarding CNGR.... I told someone on PM that I would be stunned if CNGR reopened below $8. After it reopened obviously I was stunned. Some might even say I was stupid because I bought more, but I don't think so. I may be missing something but here are a few things that come to mind. 1. ..Crown Group said it expects the deal to increase earnings per share by about $0.40 in the 12 months following the acquisition. More than twice what they are expected to do this year. 2. ..$33.5 million in cash and $7.5 million in a five year seller note). The cash portion of the purchase will be funded from a senior debt facility and cash to be provided by Crown. No stock dilution and they should get 16+ million or so after taxes if they wanted from their INKT investment. 3. ..Headquartered in Rogers, Arkansas, Car-Mart is one of the largest ''Buy-Here Pay-Here'' used car dealers in the United States, with annual revenues approximating $52 million. Car-Mart underwrites, finances and services retail installment contracts generated by its 30 dealerships located in niche markets throughout Arkansas, Oklahoma, Texas and Missouri. Car-Mart presently services over 15,000 retail installment contracts, representing approximately $46 million in net finance receivables... The additional 52 million will put them close to or over 100 million in revenues. They have been very successful with PAACO Automotive in a niche market. 4. Company was growing around a 30% clip before the acquisition. They posted a first quarter profit of .10. If they do that for the next four quarters, that will give them .40 for the year BEFORE the .40 they are projecting for the next 12 months with the newest acquisition. That will only be approx. 6 months of this years numbers, so say .20. That is .60 for this year for CNGR. Growing at 30%+, assigning a pe of 20 should be reasonable. That being the case, prior to acquisition stock should easily be worth $8. After acquisition, stock should easily be worth $12. 5. Company has a book value currently between $6 and $7 right now. What am I missing? Any ideas? Cary PS your welcome David. I think? lol