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

To: JoeinIowa who wrote (10952)	12/3/1998 12:48:00 AM
From: Cary C	Respond to of 29382

>>You have asked in the past that I state my opinions even if they differ from the rest of the crowd.<< Please do and thank you for your thoughts on CNGR. No one is perfect here. I am constantly learning because of the shared information from a lot of people on this thread. Some thoughts on your questions regarding CNGR >>Even if the INKT shares(which can be sold 12/8) are sold that is only around 22M<< When I spoke to the company they were looking at ways to protect their investment in INKT such as puts. At the time it was closer to 28 million before taxes ( at today's close it was still right around that price ) >>For this latest purchase where is the cash coming from?<< and >>They are already loaded with LTD to the tune of 50M. << I would assume they would be able to use this along with cash from INKT. ... $22 million remaining to be drawn on the credit facilities of Paaco, Concorde, Precision and Home Stay, although the majority of such additional draws may only be made in connection with a corresponding increase in the related collateral asset (i.e., finance receivables, mortgage loans held for sale, intermediate bulk containers and lodging facilities),... The second part is always an interesting discussion with growth companies... Long term debt or stock dilution.. Personally I prefer long term debt. Especially when the company is making money like CNGR has shown. There has been very little dilution of the stock. Most has been paid for with cash or revolving credit line. A quick look at the last 10Q shows that the assets have increased more than the liabilities from the previous year totals by 7.7 million. >>Their statement of it adding .40/share to next years earnings seems aggressive. They are buying a company with 52M in sales.<< Definitely a valid concern especially without seeing audited numbers. Assuming that the revenue numbers are correct. Incorporating the successful model that they have used for Paaco and assuming anticipated growth and some economies of scale from the acquisition such as accounting dept, payroll, etc., the numbers might not be that far off. Paaco has grown over 30% so say they grow maybe 20%, that would be 62.4 million next 12 months. Do you think with saved costs that 6-7% to the bottom line would be fair? If so that is .37 to .43 a share.