S.A. Advisory E-Mail Update

Oct 16,1998

Dear E-mailers: website: http://www.saadvisory.com

Lower rates will prevent the US economy from slipping into a recession during 1999! We anticipate that the FED will continue further rate cuts before year- end. This will help the world economies dramatically, which includes Asia, Latin American and Russia!

On Sept 23, 1998 when we released our last E-mail we mentioned that we became very BULLISH towards Russia!

Our two selections at that time:

Lukoil--LUKOY @$13/share and Vimpelcom--VIP @ $5.75/share.

As of today LUKOY has rocketed to $17.25, while VIP exploded to $12.00

Russia is and will remain very volatile and risky during the next couple of years! The rewards for the risk oriented investor could be remarkable!

If you would like to visit Lukoil's website--www.lukoil.com Vimpel's website--www.vimpelcom.com

The best international stock-site on the internet hands down!! www.adr.com Most international stocks can be found at this site. Any and most information concerning the company can be harvested , ie; news, charts, research, financials and corporate.

We are not certain that LUKOY or VIP will continue to climb, but the opportunity exists LONGTERM! Lukoil in our opinion may very well be the cheapest stock in-the-world with greatest upside potential during the next 5 to 10 years, also offers risk that most cannot handle! The company boasts that it controls the 4th largest oil reserves in the world. It trades at less than .2 of sales-- most major Oil's trade at least at 1X sales! We have been told that the Book-value is around $60/shares--have not verified this number since the de-value of the russian ruble. The 52-week range $123.00-- $8.25 The rate drop today should continue to firm this market. We will expand our coverage on LUKOY and VIP within our next newsletter coming soon!

Vimpel-Communications--phone# 212- 815-2372--The company is a provider of cellular telecommunications services in Russia, including the City of Moscow and the Moscow region. For the six months ending June 30th sales equaled $177 million(US dollars) and income/share equaled $1.17 --based upon 19.2 million shares( actually 25 million fully diluted). The third quarter numbers could be terrible since the devaluation. The book value at the end of the second quarter was around $8.72 and $48 million is cash. This is going to change! The 52-week range $59--$4.25.. The risks are of course present, but the reward potential is HUGE.

The Templeton Russian Fund is something else to consider! We first recommended TRF @ $19 on or about 9-27-96 this includes the $2.50 dividend that was issued- We sold the total position during late 97 or early 98 at $60+.. Well now the TRF is around $8.50-$9.00. We also have purchased a small position in this fund.

In our opinion--The real risk is not owning shares in the quality issues, such as lukoy and VIP. We intend to monitor our positions in both issues for % gain performance.

Broker contact: Greg Nelson--1-800-269-9460


Homeland Holding Corp: HMLD The company operates a chain of supermarkets in OK, southern KS and the Texas Panhandle region. ( Phone: 405-879-6600) The company operates 70 stores.


4.8 million shares outstanding
SOROS FUND MANAGEMENT owns 630,815 shares
FRANKLIN RESOURCES owns 405,662 shares
MANAGEMENT- 141,855 shares
Book value--June 30th--$7.76
cash---$5.8 million
52-week range---$3-$9.00
6-month sales--$244,912,000.00 with .27 net income/share before
AMORTIZATION OF EXCESS REORGANIZATION VALUE! When you include this non-cash item the net
income turns into a loss of $1.07/share!

Within the latest 10Q --Management Discussion:

The company is amortizing its excess reorganization value of $45 million over a three-year period, and such amortization has affected earnings significantly. If the company excluded such amortization of excess reorganization value for the 12 and 24 week ended June 30th 98, the company would record net income per share of .09 and .27 ,respectively. This write-off will affect earnings for the next 5 fiscal quarter.

The company will show sales of around $450-$475 million for the year and earnings before the NON-CASH item of .50/share(this is our guess, but the six months prior indicates something! When we publish our next letter we will zero in on more finite numbers.

Anyway that you digest this situation indicates that the downside is limited, while the upside potential looks very promising. If HMLD earns .50 before the non-cash item it currently trades at 7X est 98 numbers! It currently trades at only 40% or so below stated book and .035 of sales. The supermarket arena has been a tasty takeover segment and HMLD may get eaten! G. SOROS is a very smart investor and owns 12%.. This situation is unknown and lacks research! We intend to monitor this situation for percentage gain performance. The current price is around $3.375. HMLD trades on the nasdaq AND is marginable!

Broker contact: Greg Nelson--1800-269-9460

((((( OTHER STUFF))))

isol---delisted by nasdaq --dead for now and maybe forever! The merger may be off. In my opinion the deal was very misleading!

pcsh and pcsn--Strong BUY for both Hard to believe that Payless sits at $1 with $2 billion in sales-pcsh Hard to believe that PCSN with net income of $1.25 or so from continuing operations for the six months sits at $3.75

seto--we are in the show me mode!

ggnc--internet & gaming--It is a shot and lasts longer than Vegas -bought at .30-- now .15 -.28--still an interesting speculation

walb and walbp---very cheap! Walbp yields 13%

fpcx--cheapest penny stock in our portfolio! earnings during Nov.

hir--killed, but we sold half @ $11.375--now $4.25-recom. @$5.00

Our large OIL PATCH portfolio look'n good-- see last newsletter for complete portfolio.

We at S. A. Advisory may purchase all or some stocks mentioned in our e-mail's and in our newsletter prior to any release. We may also trade any of our positions at any time without further notice. All investments involve a certain degree of risk. Please review the latest corporate documents before investing and call management if you have questions. We have not been paid by any listed companies.. When we produce a Corporate Profile we receive a fee! We are always fully disclosed and our intentions are to report with NO hype!

Our phone service subscriber are usually informed via phone when we recommend a BUY or SELL. We inform our paid phone service subscribers first.

For more information concerning our service --call 801-272-4761 1-year phone service+ newsletter--$550/year--we call you! 1-year phone service+ newsletter+ you can call us and we call you!-- $1100.00/year

Yours Truly, William Velmer

Copyright © 1998 S.A. Advisory