S.A. Advisory E-Mail Update

March 15, 1998

Dear E-mail Subscribers:

Lots of stuff happening for S.A.Advisory e-mail investors!

First: New Buy recommendation:

Dear E-mail Subscribers:

Lots of stuff happening for S.A.Advisory e-mail investors!

First: New Buy recommendation:

On March 13 our phone service investors were notified about our new BUY recommendation on Epolin,Inc. (epln--nasdaq-bb--.33).( Our phone service investors pay us $450/year for early notification of our low price stock recommendations- includes the hardcopy newsletter--for more information call us at 1-801-272-4761--Serious investor types want the information FIRST!)

Epolin, Inc. (epln)

The company is principally engaged in the development, production and sales of near infrared dyes to the optical industry for laser protection and for welding applications and other dyes, specialty chemical products that serve as intermediates and additives used in the adhesive, plastic, aerospace, pharmaceutical, flavors and fragrance industries to a group of customers primarily in the US, Europe, Australia and the Far East. Dyes are used for filters,Heat shields, Security Inks and Hard Coatings 

                     Select financial Data
                                        9-months
              1996A      1997A            1998A      1998E       1999E

revenue       $1.3 mill    $1.4 mill      $1.2 mill   $1.6 mill    $3. mill

income/share     .05          .02            .02        .04           .09

book value       .10          .12            .14        .15           .24

P/CF             .83X        5X              --        7.1X          3.5X

PSR              .41          .82            --        2.3           1.2

PE              1X           5X              --        8.25X         3.6X

values used for
share prices     .05         .10           .33           .33           .33

Why We Like Epolin Inc.

  1. Unique and special business with huge growth potential long term.
  2. Experienced and dedicated management that takes very small salaries.
  3. During Dec 97 company was approached by 2 companies interested in purchase of or merger with Epolin.Inc ( See January 9, 1998 press release.--still pending)
  4. On March 6, 1998 the company announced a stock Buy Back program. Management will spend up to $150K to purchase and retire stock.
  5. Company has no debt. As of November 30, 97 epln had total assets of $1.7 million and only $128K of debt. equity to debt ratio 12.5 to 1.
  6. One-third of book value is cash (a pristine balance sheet).
  7. fully Reporting with timely SEC filings--10K and 10Q.
  8. No legal proceedings
  9. The company believes that its available cash from operations and projected revenues will be sufficient to fund the company's operations for at least the next 12 months.
  10. Net operating loss carry forward of approximately $1 million --will shield company from certain tax obligations.
  11. Revenue growth for fiscal 99 is anticipated to grow by almost 100% over fiscal 98-- profit margins will remain high--the income anticipated at a whomping 33% of sales.
  12. In conversation with management( James Ivchenko--president) revenues for fiscal 1999 will range from a low of $2 million to a high of $ 4 million and is comfortable with our $3 million in sales and $1.05 million in net income or .09/share.
  13. Looking forward (fiscal 99- April 1, 1998) EPLN has a very favorable mix of fundamental variables that bodes well for further stock appreciation, namely(based upon share price of .33--initial recommended price) pe est. of 3.6x,psr of 1.2, p/cf of 3.5X and trading at less than twice est. book.
  14. Management controls 55% of 11.6 million shares outstanding--Historic high for epln was $1.5 after initial IPO--Been public since 1987-- 400 plus shareholders---company changed direction during early 1990's.

Overview

In our opinion EPLN has all the ingredients of a solidly run growth oriented mini-micro cap that is extremely unique not only for the nature of its business, but for the pristine condition of its balance and income statement.

We believe that certain investor types will migrate towards EPLN, that is, ones's that favor solid fundamentals, consistent sales and earnings, ample cash, no debt and sizable NOL.

One must also be impressed by the relatively small salaries the management receives. EPLN has a unique business that as mentioned earlier in this report is currently being reviewed by 2 potential suitors-- This we find as very unusual for such a small public entity.. This alone indicates that "smart" money sees something unique and very promising. A final element to the EPLN story that we find extremely Bullish is the announcement of a Stock Buy Back program dated March 6, 1998. If you are looking for a strong mini-micro investment opportunity for your diverse portfolio with limited downside risk and promising upside potential over the long-term--EPLN might be for you!!From all indications- based upon our est. PE,PSR,P/CF,Price to Book,cash on hand and no debt -Epolin, Inc. should trade over $1.00 within a year.

We intend to monitor this opportunity in our Summer Portfolio 1997 #1 and#2 for percentage gain performance.

For more info--corp--201-465-9495
[email protected]
Broker--Mike Chesler--1-800-331-1355

*******************Other Important Stuff************************

  1. GEGI--recently the stock has EXPLODED on the Upside! We believe that the upside potential in this issue will be quite dramatic during the next 6- months--see the latest press and read between the line..Strong HOLD and BUY on any weakness! 212-755-1122..Initially recommended @.375--now .87
  2. PCSH-- has also exploded $2.oo during the past 10 day --we know that recent annual report has been released..Something else must be up! Initially recommended at $2.125 now $4.50---recommended in last newsletter when we featured SETO as our stock pick of the year.. We initially recommended SETO at .07 and now it is trading higher .68---Strong Hold and Buy on any weakness! Earnings should be out soon for the year--we are assuming .11 to .12 --based upon management forward statement!!
  3. Cymer,Inc. still a BUY!
  4. We think that INTI could surprise us on the upside when they release the past due 10K and current 10Q..currently .18
  5. During the next few days we will release our Corporate Profile on SC&T International (nasdaq-bb--scti) We were paid to produce a complete report on the company--After reviewing the company we have decided to monitor SCTI in our Low Priced Portfolio for percentage gain performance.. At .11 we see little risk and HUGE upside potential if the company can meet anticipate revenue and earnings est for fiscal 99 and 00.. Phone service investor were notified on March 12,1998 about our "new" recommendation on SCTI..
  6. Finally--we are still watching HP, IPEC, SFAM, RDRT,--PAIR is a Buy! We also like SPCT,EGLS,--CYMI is a superb high tech holdings.

Yours Truly,
William
http://www.saadvisory.com

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Happy Investing!!

Copyright © 1998 S.A. Advisory