Absolutely. COOL is a buy, and offers a great risk/reward ratio IMO.
COOL's ads are the freshest advertising in a long while. These ads have the professionalism of a much larger
company. This according to several advertising pros (execs).
One ad exec paraphrased the link logic (his words):
[Sci-Fi--Future--Trouble--Help--Go to Outpost.Com]
There is also belief that these ads will be and can be running in movie theaters. And very effectively he
added.
I can't wait for James Bond to order that bad guy busting gadget from Outpost.Com.-g-
Fund managers and analysts are starting to pound the same drums; those of consolidation and value of the
customer relationship (list).
COOL continues to grow. Outpost.Com Brand is growing, but has a long way to go, as the stock price
does.
COOL is a good company, in a good sector, with a great outlook. We are now approaching Fall and
Christmas selling seasons, which are traditional PR manic event periods, with explosive sales.
100,000,000 PCs are going to be sold in the year 2000. Let's say this remains flat. At
$1000 per that's $100,000,000,000. Software, service, services, and accessories is
another $100,000,000,000. Throw in digital cameras, and you get another
1,000,000,000. (low estimate)
Total market of 201,000,000,000.
It is estimated that E-Commerce will represent 10-25% by 2002.
So, we have a market of 20,100,000,000 to 50,250,000,000.
Can COOL get a 10-15% market share? Yes.
So, we have a $2,100,000,000 to $3,150,000,000(10%)to $3,015,000,000 to
$7,537,500,000 (15%)revenue potential.
Let's go low, margins of 10%. That's $210,000,000 to $753,700,000 in gross margin.
Can COOL obtain these results with expenses of $150,000,000?
Yes.
Operating Income of $60,000,000 to $603,700,000.
35% taxes
EPS OF $1.75 TO $17.44 PER SHARE.
Pick a PE. Say 20?
Stock price of $35 to $348.80
And what happens if margins are improved? WOW!
Wall Street currently believes that critical mass is the first metric. Revenues.
With retention revenue rates of 50%, COOL is proving that keeping customers is attainable.
There are similar models and strategies using this same concept. ATT just proposed to buy Media
One, for $5,600 per customer, as they see the revenue stream possibilities long term.
As an investor, one must look at three main things, constantly. Sector, company,(business model)
management. And then evaluate the likelihood of success. One must also gauge the sentiment of the market's
opinion of the above. This is what makes this business fun.
COOL is doing many things right, and many things first. The Internet is a new landscape. New brands and
branding are taking shape. One must be a visionary, and a risk taker to truly profit. Remember the pundits
against MSFT, INTC, as they believed IBM and Control Data would eat them alive?
Remember the criticism of the grocery strategy of Staples and Office Depot.
Yes, all investments carry risks. We must look at the reward/risk ratio, and decide.
And COOL IMO, offers a great wealth building opportunity. And short term, it is far more likely to climb
higher, than go to single digits, especially since the potential is still evident.
Growing markets are by nature and definition competitive. Talk
about increased competition, and the argument thereof to support a
bear on COOL is quite simply amateurish at best.
A telling sign of a growth market, is the attraction of competition.
The investor then must make a choice of what company is best
positioned to exploit this growing market.
COOL is definitely one of the bright rising companies in this arena.
What novices do not understand is the new dynamic upon us. How
Etailing reduces costs throughout the entire marketplace.
Just a few benefits of etailing, which are forgotten by the
naysayers:
No inventory shrinkage. (shop lifting)
No high turn over retail sales people. (high costs)
No or minimal weather impact. (snow keeps the shoppers at home)
No real estate costs.
No retail fixture costs.
No retail remodeling costs.
24 hours operations.
Excellent cash flow ratios with a/p and a/r.
No sales taxes.
Easier and less expensive record keeping. (reduced accounting
costs due to no multi-state regulations)
I will also add, that as COOL grows revenues, its cost prices and
payment terms with vendors will improve dramatically. Do you
really think COOL is buying at the best volume pricing yet?
Yes, things look extremely bright for this sector. To say otherwise
is ignorant IMO. The debate can be on which companies will
prosper, but not on if companies will prosper. They will. And
COOL is positioned very well to do so.
Good Trading, LF |
