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

To: Cary C who wrote (12943)	1/21/1999 9:23:00 AM
From: lostmymoney	Read Replies (2) \| Respond to of 29382

some more on GTNR - SALT LAKE CITY, Utah - Gentner Communications reported another strong quarter today, with sales up 31% and net income up 80% compared to last year. If you adjust last year's earnings for income taxes (they paid no tax last year), net income actually increased 190%. More importantly, Gentner showed confidence in the remainder of the year by upping fiscal-year 1999 estimates to 23 to 26 cents per share. With the 12 cents already booked for the first six months of this year, they are projecting 11 to 14 cents for the next six months. As cautious as Gentner has been in the past regarding earnings estimates, and given their track record of beating estimates, they should easily be able to achieve these numbers. Gentner's gross margin improved slightly from 54.2 to 55%, which matches the highest gross margin in the last three years. Expenses declined slightly. The balance sheet continued to improve - just about every penny of earnings went straight into their pile of cash, which now stands at $2.5 million, up from $2 million a quarter ago. Inventories dropped again, now down to $2.2 million from $2.5 million last quarter. Long term debt dropped from $325 thousand to $265 thousand, and could easily be paid off if Gentner had the urge. On the negative side, sequential sales (Q2 vs Q1) dropped 4.5%, the first drop since the March 1997 quarter. Also, there is a limit to the improvements they can make regarding inventory reductions and expense controls. At some point, the earnings growth rate will slow to the sales growth rate, which stood at 39% for the first six months of FY 99, but has historically been in the 20 to 30% range. On the other hand, the foray into video-conferencing has HUGE potential, especially given Gentner's solid reputation and network of dealers. If Gentner's video-conferencing system catches on, they could accelerate their sales (just look at Polycom). The market reaction to the earnings report has been strong - as of this writing, the stock is up 10% on heavy volume. Even at the current price of $4, the forward P/E, based on the new estimates, is 15 to 17, which, of course, compares extremely favorably with their growth rate, with market P/Es, and with competitors' P/Es. Another positive quarter will give Gentner two straight years of profits. Another 25% increase in the stock price, up to $5, will put Gentner on a whole lot more fundamental screens. And the current market cap of $30 million is a lot tastier to an institution than the market cap of $8 million a year ago. Gentner is definitely going in the right direction

To: Cary C who wrote (12943)	1/21/1999 6:55:00 PM
From: Instock	Read Replies (2) \| Respond to of 29382

Cary: Thanks for posting the Amigo Write up on GTNR. I tried to buy the stock near the close today but I ran out of time. I plan on buying in GTNR first thing in the AM. Reading the write up now. Looks good! Very Nice 6 month Target but are you guys trying to be a bit conservative now? At first glance, the stock looks to me like it could do much better then $7.50 BEFORE 6 months time. Rough day in the market today. Many of the stocks I watch, were down today. Better luck in the coming days..... Scott