S.A. Advisory E-Mail Update
August 9, 1997Dear E-mail Subscribers:
In this meno we intend to update our on-line concerning a number of corporate developments and introduce a few new opportunities that investors should consider.
The sudden drop in the Dow during the past few days is obviously healthy and has been created by the recent rise in the long Bond. Rates have gone from 6.22% to almost 6.75%. A few economical re- ports have made investors agitated and given them a reason to lock-in recent gains. We continue to believe that investor interest will stay strong and that eventually the flock will migrate towards the lower second tier and the third tier investment opportunities. BOTTON-LINE: We would sell any stock that appears fully valued relative to historical fundamental valuations.
Recently, the company has in our opinion tripped-up temporarily and this can be seen by the July 29,1997 earnings release that showed only .01/share income (estimated @.18- so they were way off!)
Reasons why we are recommending ANET:
Just remember if everything was perfect this stock would be at $30 Bills instead of $13.25. We alway love what everyone else hates and that is why we are successful.
We will monitor ANET for % gain performance in our 900# portfolio.
The company develops, manufactures, and markets Frame Relay wide-area network access products which support a broad range of voice,data and integrated network applications. The company is focused on three strategic markets: enterprise networks,satellite networks and carrier networks. The company's products incorporate advanced voice and data compression algorithms, switching capabilities and proprietary inte- gration technologies.
Corporate # 805-388-2474 att:Mr Flowers Broker contact-1-800-453-9408--Greg Nelson
As you may recall on August 5th we introduced Computer Devices (CTDVB), the company has recently introduced an Internet product that allows the user the ability to surf-the-net HANDS-FREE. (see last E-mail-dated August 5,1997). As mentioned,the product was being sold in CompUSA,but on August 7,1997 the company announced that BEST BUYS and it's 270 store would also start carrying this product and additional computer chains are anticipated to carry this product as well.. We believe that some- where down-the-line a hardware company could easily bundle this product with other software.. This situation ran to .75 from our initial price of .40.. We think this stock could rocket to $2.00 near term if they keep signing agreements..For a look-see at the product,visit the site, namely,http://www.voisys.com.
This next situation looks very interesting based upon fundamentals!
INOTEK Technologies (NASDAQ-INTK) markets and services instrumentation, process controls, factory automation, and test and measurement equipment. In our opinion the situation is severely undervalued based upon fundamen- tals,totally obscure and is not followed by anyone!
For the 9-months ending Feb 28,1997 sales reached $18 million and income/ share equalled .08 --At present there are only 4.4 million shares out- standing..For the year ending May 31th --which-by-the-way should be released on or about August 11, 1997 we are hearing that sales will reach $ 24 million and earnings will come-in at .12/share..At the present share price of 15/16 INTK trades at 7.8X trailing 12-month P.E.. The current book-value is around $1.35 so INTK trades at a 43% discount to it's stated Book.
With respect to Price-to-Sales--INTK looks extremely cheap as well--a value of .17 -that is, INTK is only trading at 17% of sales --Remember a value of 1 is consider cheap! INTK also has almost no long term debt. The float is only 2.4 million. During the past few years this stock has been form a solid around this area- so we little downside risk.
What we have here is a company that is trading at a P.E. of 7.8, 43% below stated Book, .17 PRS and has no debt.
One has to take a serious look at this situation if your portfolio is geared towards micro-minis that are unknown,obscure,under-followed and totally under-valued.
Corporate phone# 214-243-7000
Those of you who have purchased Platforms International (nasdaqbb-plfm) you should be very happy for that stock has launched itself from our .08/share to the .45/share level. If you want big profit-you got it!
From our last newsletter SGI and DEC continue to fly.
We hope that all of our E-mail subscribers are enjoying our newsletter and E-mail recommendations and features.. As mentioned, for a limited time, we offer this service for FREE and this will continue for sometime to come,but eventually will charge a fee,but first we want to prove to you that our stocks selections will make you money-because if we make you money most will want what we have to offer.
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Yours Truly, William Velmer
Copyright © 1997 S.A. Advisory