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Non-Tech : NATIONAL RECORD MART (NRMI) -- Ignore unavailable to you. Want to Upgrade?


To: kgreen who wrote (26)12/8/1998 9:24:00 AM
From: Ginco  Respond to of 34
 
NRMI represents the best-undervalued opportunity in the group when comparing Earning Per Share (EPS) estimates, Market Capitalization, and PE. Let's have a look:

1) CDNOW INC (Nasdaq: CDNW):
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Stock price: $19 7/8: up +$2 15/16, (+17.34%).

Consensus Estimates (EPS): This Year (Dec 98): a loss of -$2.83. Next Year: a loss of -$2.91.

Market Capitalization: $351.3 Million. Shares Outstanding: 17.7 Million shares. Float: 4.10 Million shares.

PE: Not applicable due to expected losses.

2) TRANSWLD ENTMNT (Nasdaq: TWMC):
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Stock price: $23 ¾: up +$2 (+9.20%).

Consensus Estimates (EPS): This Year (Jan 99): a profit of +$1.11. Next Year: a profit of +$1.34.

Market Capitalization: $777.5 Million. Shares Outstanding: 32.7 Million shares. Float: 12.1 Million shares.

PE: 23.75 / 1.34 = 17.72.

3) NATL RECORD MAR (Nasdaq: NRMI)
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Stock price: $9 1/16: up +$7/8 (+10.69%).

Consensus Estimates (EPS): This Year (March 99): a profit of +$0.60. Next Year: a profit of +$1.00. (The WSJ estimated that next year earnings could go as high as $1.47.)

Market Capitalization: $43.0 Million. Shares Outstanding: 4.75 Million shares. Float: 3.40 Million shares.

PE: 9.16 / 1 = 9.16.

PE according to the WSJ estimates: 9 1/16 / 1.47 = 6.16.

It is clear that when comparing EPS, Market Cap, and PE, NRMI is grossly undervalued at these prices. Also, please remember that TRANSWLD ENTMNT already opened their Internet stores. NRMI did not. Any additional revenues and EPS from Internet business would increase NRMI future earnings and would also reduce their PE even further.

If we try to calculate a relative fair price for NRMI by comparing it to TRANSWLD ENTMNT on a PE basis, we would receive a price per share for NRMI of:

17.72 x 1 = $17.72,

or 17.72 x 1.47 (according to the WSJ estimates) = $26.00.

$26.00 per share would also be a fair takeover price for NRMI in our opinion



To: kgreen who wrote (26)12/10/1998 11:07:00 PM
From: Ginco  Read Replies (1) | Respond to of 34
 
"They think it's better late than never." That said, she thinks companies that haven't quite worked out the kinks are wise to take the time they need. It's better to be late than to put something up that damages the image the company's built in its other stores. National Record Mart could have been on the Internet in November, said Stephenson. But he wants the site to be as fast and user-friendly as possible for both teens in search of the latest from NSync and for store owners interested in making bulk trades of CDs. Among other things, the site will allow individual buyers to choose from more than 28,000 songs to create their own CDs on a song-by-song basis. The resulting mix could be either manufactured in disc form or simply downloaded by the customer. In addition, the National Record Mart's sophisticated system is expected to venture into new territory for online music retailers. It will use uniform pricing codes to build a database that can create a sort of commodities market for the music industry. For example, a retailer with 1,000 extra copies of Garth Brooks' latest might post that inventory on the site for resale to other stores. National Record Mart would collect a service fee. Analyst Roger W. Porter, with Branch, Cabell, is excited about the potential in that idea. "There's some real sizzle to that," he said. While he's disappointed that National Record Mart is missing the early Christmas retail rush, he believes getting the bugs out of the system will be worth it in the long run. Even the largest companies can be tripped up by technical difficulties. Yesterday, the popular ebay.com online auction site was shut down for several hours by a computer problem. And online news services last week were reporting the Toys "R" Us site closed up shop for a few hours last Wednesday. In that case, the system was overloaded by the large volume of users. "I hope I don't have that problem but I hope I get close to that problem," said Stephenson, with a laugh.
(c) 1998, Pittsburgh Post-Gazette. Distributed by Knight
Ridder/Tribune Business News.

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