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Technology Stocks : ALU - Allou Health & Beauty: Another Web Play -- Ignore unavailable to you. Want to Upgrade?

To: Linda Kaplan who wrote (370)	5/9/1999 11:44:00 AM
From: Questerr	Respond to of 418

Linda, Unfortunately I don't know the answer(s) to all of your questions. What I was able to find out during my conversation with David is the license was either part of Allou when they bought the company way back, or came to them through some sort of acquisition along the way back to the early 80's??? At the time these licenses weren't considered all that valuable - but since then the drug companies themselves have changed the way they distribute product - and where possible have eliminated these licensing arrangements by either buying them back or not renewing them. Again I am fuzzy on the details, but apparently the one we own is good "forever" (non-revocable) and transferable (kind of like a liquor license or Taxi cab's medallion - for lack of better examples). David cited a company that had a similar license to ours - that was losing $$$ (margins were negative) and another company acquired them just to get at the license. He threw out the $300 million figure - I assume he is speculating a bit - but nonetheless it appears to have some significant value attached to it. I am equally excited about the private labeling business - the names he listed JC Penney and others have huge distribution channels. You also read where he bought a company in Florida that was just breaking even and turned it around to earning 20% gross margins. He is a smart man executing a solid business plan. It may take 12 months or so before the Allou strategy hits on all cylinders - but we are getting close. Don't forget his competitors (which are a bit larger)command P/E's of around 31, Allou is at 8-10. One of his largest competitors went out of business recently, and David claims by product commingling he has nearly twice the margins per $1 of revenue than the competitors who sport 31 PE's. It is just a matter of time before the real long-term value investor takes notice of this little company and buys this stock. The AMEX listing has been hurting us considerably - but we will be moving to either the NYSE or NASDAQ sometime this year. Last note - I directed David to this message board to get an idea of what the little guys (like you and me) are saying about the company. He just may check it out - although he thinks his employees spend too much time at work surfing the internet!!! : )