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Microcap & Penny Stocks : QSOUND LABS INC - - QSND - - ACER GROUP - - IBM -- Ignore unavailable to you. Want to Upgrade?

To: Larry G. who wrote (674)	5/4/1999 2:03:00 PM
From: Scott H. Davis	Respond to of 857

I would rather examine the given 1st. They just did 800k 4 qtr 1, after 600k qtr 4 98. Exen increasing the rate of revenue growth, I'd be more comfortable with a 5-6m revenue projection as far as a buying decision. But even 5m in revenues would lead to some serious EPS growth. Since their fixed costs are relatively low (and being debt free) if they lost a penny on 600k, broke even on 800k, 1.2m would perhaps yield .02, 1.8m .05, 2.6 .09. That sort of EPS progression would get a lot of attention, especially with their Inet connection (profitable Inets and Biotechs are both kinda odd) Only problem with this simplistic approach is that, examining the macroeconomic horizon, I expect that Y2K will place enough additional strain on an already unhealthy global economy that I suspect an economic downturn is very likely. Since Q's products are largely purchased with discretionary income, I doubt the 4th qtr will be a blockbuster (or even more likely, if it is a great report, the climate at the time the report comes out may well be much less rosy) IMSCO Scott Rainier follows this more closely, so perhaps his opinion on this would be valuable.

To: Larry G. who wrote (674)	5/4/1999 2:29:00 PM
From: HeyRainier	Read Replies (1) \| Respond to of 857

At a P/E multiple of 20, $6.00 after the one-year rolling period after the Cetera's release, based on TTM earnings of $0.30. Forecasted earnings the following year is $0.60 (we'll see if that holds), meaning $12.00, longer term. The internet side of the business is the bonus, and if QSound can capitalize on some new relationships to strengthen its grasp of internet 3-D sound, then look out for possibly higher valuations. The assumptions underlying the forecasted numbers can of course change, however. Regards, Rainier