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Non-Tech : Cendant Corporation (NYSE:CD) -- Ignore unavailable to you. Want to Upgrade?

To: T Pat who wrote (3087)	3/5/1999 7:42:00 PM
From: Alain Dubreuil	Read Replies (1) \| Respond to of 3627

Positive Comments from Value Line Alain Dubreuil Cendant's efforts to regain financial stability and earnings growth are proving successful. After last year's accounting scandal, which forced the company to restate the last three years of earnings, Cendant has been pursuing various means to win back investor confidence. Foremost among its decisions has been the divestiture of non-strategic subsidiaries and a renewed concentration on its core businesses. To date, this strategy has brought the company $1.2 billion in cash from the sale of two divisions. These proceeds have been used to reduce debt and repurchase shares. Furthermore, a strengthened financial condition has allowed Cendant to restructure its remaining debt. Finally, core businesses, such as mortgage and travel services, showed excellent earnings momentum in 1998's last quarter, increasing 69% year-over-year. We expect the bottom-line to advance 25% this year. Though economic growth may slow, continued strong housing markets and high consumer confidence should help to propel a high double-digit increase in the top-line. Moreover, continued asset sales, should provide ample funds to finance additional share buybacks and make debt repayments. Investors should note, though, that due to new accounting procedures relating to Cendant's membership businesses, the vast majority of the company's earnings will now be realized in the second half of each fiscal year. We expect annual earnings gains of about 20% out to 2001-2003. Assuming a continued stable U.S. economy with low inflation, there should be strong consumer demand for all of Cendant's brand-name franchises and membership programs. Importantly, revenues from the franchise subsidiaries are royalty-based giving Cendant significant operating leverage. This risky stock is timely and has above-average appreciation potential over the next 3- to 5-years. Though there are several uncertainties facing the company, including a possibly unfavorable resolution to shareholder lawsuits, continued double-digit earnings gains stand to eventually translate into a higher stock price for these shares. Yehuda Fruchter March 5, 1999