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Non-Tech : SWS - An undiscovered gem -- Ignore unavailable to you. Want to Upgrade?

To: Lennart Steiner who wrote (62)	4/7/1999 9:54:00 PM
From: caledonia	Read Replies (1) \| Respond to of 504

Lennart: There are several reasons so I will try to be as short and concise as possible. SWS owns 1.7 million shares of NITE (worth approximately $127 million) SWS has about $15 million in cash Those two factors alone are worth around $12 a share (10.7 million shares outstanding Dick Bove at RJF estimates earnings of $2.20 per share for fiscal year 1999 ending in June. PE on core operations is around 12 (Price=38.5-12=24.5/2.2=12) Bove estimates that SWS has a position worth an additional $2 per share in CSS (didn't use this in my calculation because CSS is private) SWS has the most technologically advanced system for trading on the internet (CSS) which supports both retail and institutional clients Currently, SWS has a clearing operation which is huge and growing. This is where the opportunity lies, IMO Add in their research arm, muni underwriting, asset management division, online brokerage, aka mydiscountbroker.com, and full service brokerage operation. Tangible book is $14.34 per share Earnings due out on the 22nd (whisper numbers are on the high side, however, take those with a grain of salt). Need I say more? I see the future of SWS as being very good. If NASDAQ goes to 24 hr. trading (or extended trading) which is seriously being considered, SWS will be a huge beneficiary. The clearing operation that SWS has will grow tremendously. Be reminded that all of the above is taking place without the benefit of huge ad dollars for their online brokerage unit. It is arguably the best online brokerage out there because of the new CSS system. It has extremely high ratings, but is hardly known by the investing public. If it catches on, AMTD and EGRP will be left in the dust. But, it is a low margin business and mgmt is concentrating on clearing operations (more profitable). The online unit would be gravy compared to the rest of the company. Like I said, this stock is cheap. At 30X 1999 earnings, we have a $66 dollar stock. Buy and hang on. There will be sell-offs along the way. Like yourself, I sold AOL about 3 years ago thinking it was peaked out. I'm won't make that mistake again with SWS. Good Luck!