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Technology Stocks : ALU - Allou Health & Beauty: Another Web Play -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (75)	1/15/1999 11:03:00 PM
From: Trippi	Read Replies (1) \| Respond to of 418

Blank -- I have done a ton of DD on this and all the good stuff is true -- Book value is $9.25 trialing earnings of 50 cents -- with FY99 earnings estimated at 83 cents -- I'm a little unclear on when they're fiscal year ends -- but saw one refen=rence to 3/99 -- which I need to tie down. The company clearly intends to take FragranceCounter subsidiary to an IPO. Witness the 3 million debt conversion to an equity stake in FragranceCounter and the press release on 2.5 million visitors to the site as well as $1.5 million in sales over Christmas -- but the company has not made a formal announcement yet. I think that means the next 60 to 90 days should be great for us. We have March earnings -- which should be great given the estimates of .83 (record for the company) and that doesn't include the internet sales which should add something to the pot. We have a formal announcement coming of the intention to take FC public -- from previous plays I would bet that they will try to get the IPO done before earnings in March -- witness DBCC taking MKTW public with earnings due out for DBCC soon. I could be wrong -- but I think the company is gonna have a very busy 60 to 90 days that will give this one a very good run -- our only drawback is the AMEX listing -- while that may slow us down compared to NASDAQ plays -- it will mean this one will be less volatile -- which could in the end turn out to be a plus -- less MM games etc. We will not know the terms of the IPO for a while -- but my DD would suggest that currently ALU owns most if not all of FragranceCounter -- the only likely other stake holders would be the Jacobs family's $3million debt conversion (I can't find anything that says how much of FC they got in equity for the conversion) and the possibility that their ISP or other NET service received equity in exchange for programing and site management -- which can be a common barter arrangement in these things. But right now from what I can find ALU holds all the cards -- unlike DBCC which only owned 50% of the MKTW IPO (CBS of course owned the other 50%) -- ALU's stake should be much higher -- perhaps closer to the 85% stake NAVR owns in the next big one -- NETRADIO IPO. Hope this helps -- the more I look at this the more I think we have a winner -- just the .83 cents in earnings with a PE of 17 should take the stock to $15 by March -- even if it wasn't going to do a NET IPO -- so even the downside ($15 is a pretty good downside) would be rewarding -- if the IPO was postponed or did not materialize -- but I think that is unlikely -- they are going to IPO FC.