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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (5106)	5/12/1999 11:22:00 PM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 15132

More on SFAM Article is starting to smell the more I read it and think about it. "Earnings warning?" Hello? This is the first time they have projected anything as a combined entity. Give me a break. There is no earnings warning. First call numbers referred to in the article reflected SFAM only and not SFAM - IPEC. With respect to the statement concerning declining revenues, one must understand that the combined companies had $374.3m in FY 1998. So let's assume their guidance is accurate and we are at $270-$285m in revenues in FY 2000. Well, SFAM alone earned $185m in FY 98. So right there SFAM-IPEC as a going concern is projected to produce $100m more in revenue than SFAM alone. So will someone please tell me why the whole of SFAM-IPEC should be worth less than the sum of its parts in the current upcycle? Recall that SFAM was doing approximately $.40 a quarter alone on revenues of $40m to $50m and reached a peak value of $53 per share during the last cycle. Now we will get a projected $270m - $285m or a 51% increase in revenues but we seem to be worth less in the market. With a stock price of $14 per share and approximately 29m shares outstanding in the combined entity, that would yield a forward P/S ratio of 1.45. I don't think so as SFAM alone peaked at P/S ratio of 4.7 in the last upcycle. And what about IPEC? It peaked at 5.5. Just think of SFAM as the baby LAM <g>.