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

To: Sergio H who wrote (13424)	1/31/1999 5:19:00 PM
From: Elllk	Respond to of 29382

Sergio Amigo, thanks again for the reference to VRIO comments by Jenna. Found then very interesting. Larry

To: Sergio H who wrote (13424)	1/31/1999 5:41:00 PM
From: Elllk	Read Replies (1) \| Respond to of 29382

Amigo Sergio, here is another interesting VRIO post referring to a coming article in Forbes: Message 7547682 Larry

To: Sergio H who wrote (13424)	1/31/1999 6:18:00 PM
From: Cary C	Read Replies (2) \| Respond to of 29382

Welcome back amigo. Very nice call on CLST. I see that WGNR started coming back a little with some increased volume. It was nice to see some of the old faces drop buy. I hadn't seen or heard from Peg in ages. Glad to see you are doing well Peg. In regards to HWS, some of the things I like are, 1. executives recently buying shares biz.yahoo.com 2. Their on-line internet based purchasing system has potential. Company is reporting increase of on-line ordering up from 100,000 a month to 800,000 a month. What remains to be seen though is how much of it is new business vs. existing business now just ordering on-line. Even if it is existing business it should still help reduce overhead costs. biz.yahoo.com 3. 3rd quarter and nine month earnings were nice. Comment taken from report ... The hospitality industry is beginning to notice the range and quality of our services and we believe that as our visibility increases, our growth will continue.'' biz.yahoo.com 4. 2 strong buy recommendations and eps projections for next this year of .60 and next year of .84 Last year in the fourth quarter the company reported a loss of (.13). If they make the .22 this fourth quarter which management has stated they are comfortable with estimates, that will give them .43 for the year or an approximate pe of 11.5 trailing 12 months with a forward 12 month pe of 8 and a forward 24 month pe of 6. quote.yahoo.com 5. Baseline shows long term debt at 5% and institutions owning 38.4% So why is it performing the way it is? A couple of possibilities that I can think of, 1. S-3 that was filed at the end of November. I am assuming that it has been completed but I have not been able to verify. I ask one of the more well educated and intelligent people on SI if he knew how long they had to complete the S-3 after it had been filed. He wasn't sure. Either am I. Here is a portion of the S-3 that I think may be causing some problems.. >>EITHER OUR COMMON STOCK OR OUR INTEREST IN PARKER REORDER MAY BE DILUTED At any time between January 10, 1998 and January 10, 2000, the holders of an aggregate of 120,000 shares of Preferred Stock issued as partial consideration for our acquisition of LPC (the "LPC Preferred") have the right to convert their shares of LPC Preferred into either (1) an aggregate of 600,000 shares of Common Stock (subject to an upward adjustment to a maximum of 2,400,000 shares, which adjustment is triggered when the market price of the Common Stock is below $5.00 at the time of conversion), or (2) a 5.88% equity interest in Parker Reorder Online, Inc., f/k/a Parker Reorder. Should the LPC Preferred holders exercise their option to convert the LPC Preferred into shares of Common Stock, our existing Common Stock holders will experience dilution. Should the LPC Preferred holders exercise their option to convert the LPC Preferred into a 5.88% equity interest in Parker Reorder, our equity ownership in Parker Reorder will be so reduced. Additionally, as long as the LPC Preferred is outstanding, the holders also have the right to receive 12% of the cumulative net profits of Parker Reorder, measured from January 1, 1997. In addition, the BDS purchase agreement contains a "make-whole" adjustment provision. Pursuant to a formula, we will have to issue additional shares of our Common Stock to the former BDS shareholders if the average closing price of our Common Stock for the 20 trading days prior to the one year anniversary of the BDS acquisition (January 9, 1999) is less than 85% of our share price on the date of the BDS acquisition. The closing share price on the date of the BDS acquisition was $12.25. For example, if the average closing price of our Common Stock for the 20 trading days prior to January 9, 1999 is $6.50, we will have to issue approximately 288,000 additional shares to the former BDS shareholders. We may seek to satisfy our obligations under the make whole adjustment provision through a cash payment.<< 2. Some institutions may have decided to exit the stock. If this is the case, it could have a major short term effect on the stock. Possibly much like APCO when one of the institutions sold 400k shares. It helped take the stock down from the 12 area to 6. I believe someone said on our thread that support is at the 4.75 area. Cary