Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@netside.net>
Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?]
Date: Sun, 20 Jan 2002 06:53:54 -0500
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Katherine,
Under GAAP, wouldn't software development costs be written off:
a) upon abandonment of the project (written off in full)
or
b) capitalized and amortized as the software begins to be marketed (in =
which case it would be written off over the projected sales life of the =
software).
If the software was still under development as of the end of Q3, and was =
still a viable project going forward, it would seem to me to be too =
early to begin to put it on the books aside from the salaries and other =
labor costs already being counted elsewhere in the expenses.
Tom Worley
stkguru@netside.net
AIM: TexWorley
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Sunday, January 20, 2002 12:23 AM
Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?]
Thanks for clearing this up Ian. Things like this can't be "seen" in =
the records available online. Just goes to show that with a microcap =
such as this, due diligence needs to be deep enough to uncover these =
clues. (And conversely, the same would hold for uncovering rats in the =
attic for other microcaps!)
Have you made a decision as to whether to "sell on the technicals" or =
will you wait for the next earnings announcement and conference call?
The estimates I am using are from my VectorVest software. If there are =
no analysts covering, they use past EPS and "significant developments" =
to make a forward estimate. As I don't generally follow microcaps, I'm =
not sure how reliable these numbers are. When I wrote my note yesterday, =
that's why I looked at the historical Rev/EPS numbers myself before =
taking their low forward EPS number at face value.
One thing I did note in the financials from last quarter is that they =
have not been writing off some of their software development costs this =
year. From the 10Q 11/14/01:
Research and development expenses for this year's third quarter of =
$1.7 million (or 9.4% of revenue) increased slightly from $1.6 million =
(or 12.5% of revenue) in 2000. Such expenses for the first nine months =
of 2001 totaled $5.0 million (or 10.0% of revenue) compared to $4.4 =
million (or 11.0% of revenue) for the first nine months of the prior =
year. Research and development expenses consist primarily of salaries =
and expenses of the Company's research and development personnel and =
outside consultants. The higher expenses in 2001 over the same period =
last year reflect costs for work to design and develop certain products =
to support the Company's expansion into new Professional Services =
Automation markets, partially offset by reduced expenses for Elite.com. =
Research and development expenses exclude internally developed software =
costs that were capitalized totaling approximately $320,000 for the =
third quarter and approximately $900,000 for the first nine months of =
2001. No software development costs were capitalized in 2000.=20
The increased R&D effort for EIS is expected to continue through 2001 =
as the Company completes development of its new product lines. The =
Company is committed to maintaining strong research and development =
efforts so it can continue to provide innovative software solutions as =
the needs of its customer base and target markets change.=20
Something like this would certainly make 2001 EPS numbers "look" =
better when comparing QoQ or YoY.
Katherine
----- Original Message -----=20
From: Ian=20
To: canslim@lists.xmission.com=20
Sent: Saturday, January 19, 2002 11:16 PM
Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?]
Katherine:
I have listened to the last 2 conference calls, and management =
paints a very different picture. The acquisition from last year has been =
negligible to overall revenues, and has not contributed to earnings yet. =
Rather, the fact that they are in a new product cycle, expanding =
internationally, and are moving into new verticals, has been given as =
their reason for the recent growth. Moreover, they claimed last Q that =
existing backlog should make Q4 2001 and Q1 2002 comparable with the =
last 2 quarters. They also seemed confident that their customer base and =
recurring revenue stream had finally reached a "critical mass" that =
would ensure continuing growth. They weren't sure what exact growth rate =
they would have, but they were confident growth would continue.
Finally, they were confident that the Law Manager acquisition from =
last year was finally about to contribute meaningfully to earnings.
In the face of this, it strikes me as odd that there would still be =
an active covering analyst with such low estimates. Maybe that means =
that the next earnings report (rumored to be on Feb. 11) will be the one =
that either breaks them, or sends them to a new level as they finally =
have a share price over $10 and a market cap over $100,000,000. We'll =
see.
Ian
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Saturday, January 19, 2002 6:48 AM
Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?]
Hi Tom
This is what I don't get, and I'm not trying to be =
objectionable, just trying to find out how you'd get $.16/quarter given =
the company's history. When I look at this, I see OK growth in revenues, =
but the company continuously has good and bad quarters. I noticed in the =
10Q that they capitalize software development and then write it off in =
chunks every so often (not uncommon) and it's possible that these =
negative quarters every so often are related to that. I'm guessing if I =
were to dig further into the financials I would get to know them better. =
I know that they did an acquisition in 2000, and I'd assume that the =
growth in EPS would be related. I look at Sept/Oct 99 and see really =
nice quarters just like the last two we've seen recently, but they are =
then followed by negative or so-so quarters. That raises red flags and =
would lead me to question whether the growth pattern shown recently can =
be projected into the future.
Katherine
GROWTH RATES=20
1 Year 3 Years 5 Years=20
Sales % -11.70 15.54 -14.53=20
EPS % NM NM NM=20
Dividend % NM NM NM=20
REVENUE=20
Quarters 1998 1999 2000 2001=20
MAR 8,343 12,988 13,334 14,295=20
JUN 10,850 15,401 13,741 17,392=20
SEP 12,385 15,381 12,858 18,516=20
DEC 13,484 15,496 12,399 =20
=20
Totals 45,062 59,266 52,332 50,203=20
Note: Units in Thousands of U.S. Dollars=20
=20
=20
EARNINGS PER SHARE=20
Quarters 1998 1999 2000 2001=20
MAR -0.070 0.010 0.050 -0.040=20
JUN -0.060 0.080 0.010 0.160=20
SEP 0.020 0.140 -0.020 0.230=20
DEC -0.030 0.210 -0.060 =20
=20
Totals -0.140 0.440 -0.020 0.350=20
Note: Units in U.S. Dollars=20
=20
----- Original Message -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
Sent: Saturday, January 19, 2002 8:27 AM
Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?]
Hi Katherine,
I see 16 cents as easy based on the last 4 sequential quarters =
(last two were 16 and 23 cents). Sales appear to be accelerating thru =
Q3, so even a moderate slowdown in acceleration should still leave them =
well over 16 cents/qtr.
Tom Worley
stkguru@netside.net
AIM: TexWorley
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Saturday, January 19, 2002 9:09 AM
Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?]
Tom, Ian
Just curious...where do you get $.16/Q EPS estimates? I took a =
*very* quick glance at the last 10Q, are you basing this on the =
acquisition in 2000?
Katherine
----- Original Message -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
Sent: Saturday, January 19, 2002 12:25 AM
Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion =
please?]
I agree, Ian. My second trip on this stock has nearly made =
up the loss from the first voyage. Looks more promising now than the =
first time I tried it. Sequential growth particularly impressive.
Tom Worley
stkguru@netside.net
AIM: TexWorley
----- Original Message -----=20
From: Ian=20
To: canslim@lists.xmission.com=20
Sent: Friday, January 18, 2002 8:01 PM
Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion =
please?]
Thanks a lot for the chart analysis. The low volume during =
the new high to $13.50, and the high volume/no progress days on 1/10, =
1/11, and 1/15 were the things that concerned me. I convinced myself =
that the low-volume high was just a case of 'too much, too fast' off the =
$5 October low. The recent high volume/no movement days are what concern =
me.
There shouldn't be much concern with P/E. The company =
claimed that Q4 2001, and Q1 2002 were already filled with existing =
backlog, and I figure that a minimum of $0.16 per Q is easy - so 4 =
months from now, the ttm EPS will be at least $0.70 if not more, and the =
P/E at current levels would be under 20. Given their industry group and =
recent growth rate, a much higher price could easily be supported. But I =
would like to see more signs of volume accumulation here.=20
After the next earnings report the IBD EPS ranking should =
go over 85, and the RS is over 90 already, so it should start appearing =
on IBD radar screens for the first time - including the weekend review. =
Perhaps it will be a month or so before the next clear direction becomes =
visible.
Thanks again,
Ian
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Friday, January 18, 2002 3:36 PM
Subject: Re:ELTE (was [CANSLIM] Katherine-Opinion =
please?]
Hi Ian,
Your question has me wondering whether the sell rules =
that I follow translate perfectly to thinly traded stocks. But I'll tell =
you what I see and the way I would read it if I were to own it:
-After the B/O at 7.13, stock moves up and consolidates =
for about 5 weeks. This is a "valid" consolidation so that makes the =
previous base low 8.01 which was printed on 11/23/01.
-Just as a quick check for "overextension" that means =
that the stock is 70% above the 200dMA (7.02), 15% above the 50dMA =
(10.43) and 49.6% above the base low (8.01). It gets a yellow flag for =
being 70% above the 200dMA according to WON's sell rule #34, but does =
not get a red flag for the Rubberband Sell Rule.
-After the consolidation and breakout 12/18 the stock =
has started to show signs of stress. This could easily be market =
related, but no way to tell.
-1/2/02: New high on low volume. Red flag.
-1/10/02 & 1/11/02- two days with little or no price =
progress on high volume. Red flag.
-With 1 yellow and 2 red flags I thought it worth doing =
a PE Extension check. I've reconstructed the PE at the time of the B/O =
in October using trailing EPS numbers for the prior quarters. That puts =
it at $7.13/$.29 =3D 24.59. The extension warning would then be a =
forward PE of 24.59*2.21=3D 54.3. Let's see. DGO doesn't have any =
estimates, which means it isn't followed by enough analysts. I checked =
the internet to see if I could find anything and ran across this EPS/Rev =
snapshot:
=
http://yahoo.marketguide.com/MGI/mg.asp?target=3D/stocks/companyinformati=
on/highlights&Ticker=3DELTE
I am alarmed by the essentially flat revenues over the =
last 4 years, so I am going to go with the EPS estimates in my =
VectorVest software which reads a measly $.02. That puts the current =
forward looking PE at $11.98/$0.02 =3D 599! I'll have to mark that Red =
Flag.
One note is that its industry is fairly healthy, =
consolidating after rising, not overly extended and currently ranked in =
the 2nd quartile.
I'll let you take it from there!
Katherine
----- Original Message -----=20
From: Ian=20
To: canslim@lists.xmission.com=20
Sent: Friday, January 18, 2002 4:40 PM
Subject: [CANSLIM] Katherine - Opinion please?
Would tuesdays distribution day for ELTE make you exit =
the stock at this point? Do you have any other insights into the chart?
I would appreciate your analysis - it is the one big =
recent winner I am wondering what to do with. Based on all of my past =
experiences, and knowing the companies outlook, my gut tells me that it =
needs to consolidate here, but will run into the $20's by mid-year. But =
I'd rather listen to the chart. I fear I've held it long enough that I =
may be complacent.
Thank you.
Ian
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<DIV><FONT face=3DArial>Katherine,</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Under GAAP, wouldn't software development costs =
be written=20
off:</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>a) upon abandonment of the project (written off =
in=20
full)</FONT></DIV>
<DIV><FONT face=3DArial>or</FONT></DIV>
<DIV><FONT face=3DArial>b) capitalized and amortized as the software =
begins to be=20
marketed (in which case it would be written off over the projected sales =
life of=20
the software).</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>If the software was still under development as =
of the end=20
of Q3, and was still a viable project going forward, it would seem to me =
to be=20
too early to begin to put it on the books aside from the salaries and =
other=20
labor costs already being counted elsewhere in the =
expenses.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV>Tom Worley<BR><A=20
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20
TexWorley</DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dkmalm@earthlink.net =
href=3D"mailto:kmalm@earthlink.net">Katherine=20
Malm</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Sunday, January 20, 2002 =
12:23=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: Re:ELTE (was =
[CANSLIM]=20
Katherine-Opinion please?]</DIV>
<DIV><BR></DIV>
<DIV>Thanks for clearing this up Ian. Things like this can't be "seen" =
in the=20
records available online. Just goes to show that with a microcap such =
as this,=20
due diligence needs to be deep enough to uncover these clues. (And =
conversely,=20
the same would hold for uncovering rats in the attic for other=20
microcaps!)</DIV>
<DIV> </DIV>
<DIV>Have you made a decision as to whether to "sell on the =
technicals" or=20
will you wait for the next earnings announcement and conference =
call?</DIV>
<DIV> </DIV>
<DIV>The estimates I am using are from my VectorVest software. If =
there are no=20
analysts covering, they use past EPS and "significant developments" to =
make a=20
forward estimate. As I don't generally follow microcaps, I'm not sure =
how=20
reliable these numbers are. When I wrote my note yesterday, that's why =
I=20
looked at the historical Rev/EPS numbers myself before taking their =
low=20
forward EPS number at face value.</DIV>
<DIV> </DIV>
<DIV>One thing I did note in the financials from last quarter is that =
they=20
have not been writing off some of their software development costs =
this year.=20
From the 10Q 11/14/01:</DIV>
<DIV>
<P><FONT size=3D2>Research and development expenses for this year=92s =
third=20
quarter of $1.7 million (or 9.4% of revenue) increased slightly =
from=20
$1.6 million (or 12.5% of revenue) in 2000. Such expenses for the =
first=20
nine months of 2001 totaled $5.0 million (or 10.0% of revenue) =
compared=20
to $4.4 million (or 11.0% of revenue) for the first nine months =
of the=20
prior year. Research and development expenses consist primarily of =
salaries=20
and expenses of the Company=92s research and development personnel and =
outside=20
consultants. <FONT color=3D#0000ff>The higher expenses in 2001 over =
the same=20
period last year reflect costs for work to design and develop certain =
products=20
to support the Company=92s expansion into new Professional Services =
Automation=20
markets, partially offset by reduced expenses for Elite.com. Research =
and=20
development expenses exclude internally developed software costs that =
were=20
capitalized totaling approximately $320,000 for the third quarter and=20
approximately $900,000 for the first nine months of 2001. No software=20
development costs were capitalized in 2000. </FONT></FONT>
<P><FONT size=3D2>The increased R&D effort for EIS is expected to =
continue=20
through 2001 as the Company completes development of its new product =
lines.=20
The Company is committed to maintaining strong research and =
development=20
efforts so it can continue to provide innovative software solutions as =
the=20
needs of its customer base and target markets change. </FONT></P>
<P>Something like this would certainly make 2001 EPS numbers "look" =
better=20
when comparing QoQ or YoY.</P></DIV>
<DIV>Katherine</DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dianstm@shaw.ca href=3D"mailto:ianstm@shaw.ca">Ian</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, January 19, =
2002 11:16=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: Re:ELTE (was =
[CANSLIM]=20
Katherine-Opinion please?]</DIV>
<DIV><BR></DIV>
<DIV><FONT size=3D2>Katherine:</FONT></DIV>
<DIV><FONT size=3D2></FONT> </DIV>
<DIV><FONT size=3D2>I have listened to the last 2 conference calls, =
and=20
management paints a very different picture. The acquisition from =
last year=20
has been negligible to overall revenues, and has not contributed to =
earnings=20
yet. Rather, the fact that they are in a new product cycle, =
expanding=20
internationally, and are moving into new verticals, has been given =
as their=20
reason for the recent growth. Moreover, they claimed last Q that =
existing=20
backlog should make Q4 2001 and Q1 2002 comparable with the last 2 =
quarters.=20
They also seemed confident that their customer base and recurring =
revenue=20
stream had finally reached a "critical mass" that would ensure =
continuing=20
growth. They weren't sure what exact growth rate they would have, =
but they=20
were confident growth would continue.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>Finally, they were confident that the Law =
Manager=20
acquisition from last year was finally about to contribute =
meaningfully to=20
earnings.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>In the face of this, it strikes me as odd that =
there would=20
still be an active covering analyst with such low estimates. Maybe =
that=20
means that the next earnings report (rumored to be on Feb. 11) will =
be the=20
one that either breaks them, or sends them to a new level as they =
finally=20
have a share price over $10 and a market cap over $100,000,000. =
We'll=20
see.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>Ian</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- =
</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dkmalm@earthlink.net =
href=3D"mailto:kmalm@earthlink.net">Katherine=20
Malm</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, January 19, =
2002 6:48=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: Re:ELTE (was =
[CANSLIM]=20
Katherine-Opinion please?]</DIV>
<DIV><BR></DIV>
<DIV>
<TABLE cellSpacing=3D1 cellPadding=3D2 width=3D"100%" =
bgColor=3D#ffffff=20
border=3D0><TBODY>
<TR>
<TH bgColor=3D#ffffff colSpan=3D4>
<DIV align=3Dleft>Hi Tom</DIV>
<DIV align=3Dleft> </DIV>
<DIV align=3Dleft>This is what I don't get, and I'm not =
trying to be=20
objectionable, just trying to find out how you'd get =
$.16/quarter=20
given the company's history. When I look at this, I see OK =
growth in=20
revenues, but the company continuously has good and bad =
quarters. I=20
noticed in the 10Q that they capitalize software development =
and=20
then write it off in chunks every so often (not =
uncommon) and=20
it's possible that these negative quarters every so often =
are=20
related to that. I'm guessing if I were to dig further into =
the=20
financials I would get to know them better. I know that they =
did an=20
acquisition in 2000, and I'd assume that the growth in EPS =
would be=20
related. I look at Sept/Oct 99 and see really nice quarters =
just=20
like the last two we've seen recently, but they are then =
followed by=20
negative or so-so quarters. That raises red flags and would =
lead me=20
to question whether the growth pattern shown recently can be =
projected into the future.</DIV>
<DIV align=3Dleft> </DIV>
<DIV align=3Dleft>Katherine</DIV>
<DIV><FONT size=3D-1></FONT> </DIV>
<DIV><FONT size=3D-1>GROWTH RATES</FONT></DIV></TH></TR>
<TR>
<TH bgColor=3D#dddddd></TH>
<TH bgColor=3D#dddddd><FONT size=3D-1>1 Year</FONT></TH>
<TH bgColor=3D#dddddd><FONT size=3D-1>3 Years</FONT></TH>
<TH bgColor=3D#dddddd><FONT size=3D-1>5 Years</FONT></TH></TR>
<TR>
<TD bgColor=3D#ffffff><FONT size=3D-1>Sales %</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>-11.70</FONT></TD>
<TD align=3Dright><FONT size=3D-1>15.54</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>-14.53</FONT></TD></TR>
<TR>
<TD bgColor=3D#ffffff><FONT size=3D-1>EPS %</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>NM</FONT></TD>
<TD align=3Dright><FONT size=3D-1>NM</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>NM</FONT></TD></TR>
<TR>
<TD bgColor=3D#ffffff><FONT size=3D-1>Dividend %</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>NM</FONT></TD>
<TD align=3Dright><FONT size=3D-1>NM</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT=20
size=3D-1>NM</FONT></TD></TR></TBODY></TABLE><BR>
<TABLE cellSpacing=3D0 cellPadding=3D4 width=3D475 =
bgColor=3D#dddddd border=3D0>
<TBODY>
<TR>
<TD>
<TABLE cellSpacing=3D1 cols=3D5 cellPadding=3D2 =
width=3D"100%"=20
bgColor=3D#ffffff border=3D0>
<COLGROUP>
<COL width=3D"20%">
<COL width=3D"20%">
<COL width=3D"20%">
<COL width=3D"20%">
<COL width=3D"20%">
<TBODY>
<TR>
<TH bgColor=3D#ffffff colSpan=3D5><FONT=20
size=3D-1>REVENUE</FONT></TH></TR>
<TR>
<TH align=3Dleft bgColor=3D#dddddd><FONT=20
size=3D-1>Quarters</FONT></TH>
<TH align=3Dmiddle bgColor=3D#dddddd><FONT =
size=3D-1>1998</FONT></TH>
<TH align=3Dmiddle bgColor=3D#dddddd><FONT =
size=3D-1>1999</FONT></TH>
<TH align=3Dmiddle bgColor=3D#dddddd><FONT =
size=3D-1>2000</FONT></TH>
<TH align=3Dmiddle bgColor=3D#dddddd><FONT=20
size=3D-1>2001</FONT></TH></TR>
<TR>
<TD><FONT size=3D-1>MAR</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>8,343</FONT></TD>
<TD align=3Dright><FONT size=3D-1>12,988</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>13,334</FONT></TD>
<TD align=3Dright><FONT =
size=3D-1>14,295</FONT></TD></TR>
<TR>
<TD><FONT size=3D-1>JUN</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>10,850</FONT></TD>
<TD align=3Dright><FONT size=3D-1>15,401</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>13,741</FONT></TD>
<TD align=3Dright><FONT =
size=3D-1>17,392</FONT></TD></TR>
<TR>
<TD><FONT size=3D-1>SEP</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>12,385</FONT></TD>
<TD align=3Dright><FONT size=3D-1>15,381</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>12,858</FONT></TD>
<TD align=3Dright><FONT =
size=3D-1>18,516</FONT></TD></TR>
<TR>
<TD><FONT size=3D-1>DEC</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>13,484</FONT></TD>
<TD align=3Dright><FONT size=3D-1>15,496</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>12,399</FONT></TD>
<TD align=3Dright><FONT size=3D-1></FONT></TD></TR>
<TR>
<TD bgColor=3D#dddddd colSpan=3D5></TD></TR>
<TR>
<TH align=3Dleft bgColor=3D#ffffff><FONT =
size=3D-1>Totals</FONT></TH>
<TH align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>45,062</FONT></TH>
<TH align=3Dright><FONT size=3D-1>59,266</FONT></TH>
<TH align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>52,332</FONT></TH>
<TH align=3Dright><FONT =
size=3D-1>50,203</FONT></TH></TR>
<TR>
<TD align=3Dright bgColor=3D#dddddd colSpan=3D5><FONT=20
size=3D-1><B>Note: </B>Units in Thousands =
of U.S.=20
Dollars</FONT></TD></TR></TBODY></TABLE></TD></TR>
<TR>
<TD bgColor=3D#ffffff> </TD></TR>
<TR>
<TD>
<TABLE cellSpacing=3D1 cols=3D5 cellPadding=3D2 =
width=3D"100%"=20
bgColor=3D#ffffff border=3D0>
<COLGROUP>
<COL width=3D"20%">
<COL width=3D"20%">
<COL width=3D"20%">
<COL width=3D"20%">
<COL width=3D"20%">
<TBODY>
<TR>
<TH bgColor=3D#ffffff colSpan=3D5><FONT =
size=3D-1>EARNINGS PER=20
SHARE</FONT></TH></TR>
<TR>
<TH align=3Dleft bgColor=3D#dddddd><FONT=20
size=3D-1>Quarters</FONT></TH>
<TH align=3Dmiddle bgColor=3D#dddddd><FONT =
size=3D-1>1998</FONT></TH>
<TH align=3Dmiddle bgColor=3D#dddddd><FONT =
size=3D-1>1999</FONT></TH>
<TH align=3Dmiddle bgColor=3D#dddddd><FONT =
size=3D-1>2000</FONT></TH>
<TH align=3Dmiddle bgColor=3D#dddddd><FONT=20
size=3D-1>2001</FONT></TH></TR>
<TR>
<TD><FONT size=3D-1>MAR</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>-0.070</FONT></TD>
<TD align=3Dright><FONT size=3D-1>0.010</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>0.050</FONT></TD>
<TD align=3Dright><FONT =
size=3D-1>-0.040</FONT></TD></TR>
<TR>
<TD><FONT size=3D-1>JUN</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>-0.060</FONT></TD>
<TD align=3Dright><FONT size=3D-1>0.080</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>0.010</FONT></TD>
<TD align=3Dright><FONT size=3D-1>0.160</FONT></TD></TR>
<TR>
<TD><FONT size=3D-1>SEP</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>0.020</FONT></TD>
<TD align=3Dright><FONT size=3D-1>0.140</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>-0.020</FONT></TD>
<TD align=3Dright><FONT size=3D-1>0.230</FONT></TD></TR>
<TR>
<TD><FONT size=3D-1>DEC</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>-0.030</FONT></TD>
<TD align=3Dright><FONT size=3D-1>0.210</FONT></TD>
<TD align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>-0.060</FONT></TD>
<TD align=3Dright><FONT size=3D-1></FONT></TD></TR>
<TR>
<TD bgColor=3D#dddddd colSpan=3D5></TD></TR>
<TR>
<TH align=3Dleft bgColor=3D#ffffff><FONT =
size=3D-1>Totals</FONT></TH>
<TH align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>-0.140</FONT></TH>
<TH align=3Dright><FONT size=3D-1>0.440</FONT></TH>
<TH align=3Dright bgColor=3D#eeeeee><FONT =
size=3D-1>-0.020</FONT></TH>
<TH align=3Dright><FONT size=3D-1>0.350</FONT></TH></TR>
<TR>
<TD align=3Dright bgColor=3D#dddddd colSpan=3D5><FONT=20
size=3D-1><B>Note: </B>Units in U.S.=20
=
Dollars</FONT></TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- =
</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dstkguru@netside.net =
href=3D"mailto:stkguru@netside.net">Tom=20
Worley</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, January =
19, 2002=20
8:27 AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: Re:ELTE (was =
[CANSLIM]=20
Katherine-Opinion please?]</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial>Hi Katherine,</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>I see 16 cents as easy based on the last =
4=20
sequential quarters (last two were 16 and 23 cents). Sales =
appear to be=20
accelerating thru Q3, so even a moderate slowdown in =
acceleration should=20
still leave them well over 16 cents/qtr.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV>Tom Worley<BR><A=20
=
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20
TexWorley</DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: =
5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- =
</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dkmalm@earthlink.net=20
href=3D"mailto:kmalm@earthlink.net">Katherine Malm</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, January =
19, 2002=20
9:09 AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: Re:ELTE =
(was=20
[CANSLIM] Katherine-Opinion please?]</DIV>
<DIV><BR></DIV>
<DIV>Tom, Ian</DIV>
<DIV> </DIV>
<DIV>Just curious...where do you get $.16/Q EPS estimates? I =
took a=20
*very* quick glance at the last 10Q, are you basing this on =
the=20
acquisition in 2000?</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: =
5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- =
</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dstkguru@netside.net =
href=3D"mailto:stkguru@netside.net">Tom=20
Worley</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, =
January 19,=20
2002 12:25 AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: Re:ELTE =
(was=20
[CANSLIM] Katherine-Opinion please?]</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial>I agree, Ian. My second trip on this =
stock has=20
nearly made up the loss from the first voyage. Looks more =
promising=20
now than the first time I tried it. Sequential growth =
particularly=20
impressive.</FONT></DIV>
<DIV> </DIV>
<DIV>Tom Worley<BR><A=20
=
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20
TexWorley</DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: =
5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message =
- ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; =
font-color: black"><B>From:</B>=20
<A title=3Dianstm@shaw.ca =
href=3D"mailto:ianstm@shaw.ca">Ian</A>=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, =
January 18,=20
2002 8:01 PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: =
Re:ELTE (was=20
[CANSLIM] Katherine-Opinion please?]</DIV>
<DIV><BR></DIV>
<DIV><FONT size=3D2>Thanks a lot for the chart analysis. =
The low=20
volume during the new high to $13.50, and the high =
volume/no=20
progress days on 1/10, 1/11, and 1/15 were the things that =
concerned me. I convinced myself that the low-volume high =
was just=20
a case of 'too much, too fast' off the $5 October low. The =
recent=20
high volume/no movement days are what concern=20
me.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>There shouldn't be much concern with =
P/E. The=20
company claimed that Q4 2001, and Q1 2002 were already =
filled with=20
existing backlog, and I figure that a minimum of $0.16 per =
Q is=20
easy - so 4 months from now, the ttm EPS will be at least =
$0.70 if=20
not more, and the P/E at current levels would be under 20. =
Given=20
their industry group and recent growth rate, a much higher =
price=20
could easily be supported. But I would like to see more =
signs of=20
volume accumulation here. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>After the next earnings report the IBD =
EPS=20
ranking should go over 85, and the RS is over 90 already, =
so it=20
should start appearing on IBD radar screens for the first =
time -=20
including the weekend review. Perhaps it will be a month =
or so=20
before the next clear direction becomes =
visible.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>Thanks again,</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>Ian</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; =
MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; =
font-color: black"><B>From:</B>=20
<A title=3Dkmalm@earthlink.net=20
href=3D"mailto:kmalm@earthlink.net">Katherine Malm</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, =
January 18,=20
2002 3:36 PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re:ELTE =
(was=20
[CANSLIM] Katherine-Opinion please?]</DIV>
<DIV><BR></DIV>
<DIV>Hi Ian,</DIV>
<DIV> </DIV>
<DIV>Your question has me wondering whether the sell =
rules that=20
I follow translate perfectly to thinly traded stocks. =
But I'll=20
tell you what I see and the way I would read it if I =
were to own=20
it:</DIV>
<DIV> </DIV>
<DIV>-After the B/O at 7.13, stock moves up and =
consolidates for=20
about 5 weeks. This is a "valid" consolidation so that =
makes the=20
previous base low 8.01 which was printed on =
11/23/01.</DIV>
<DIV>-Just as a quick check for "overextension" that =
means that=20
the stock is 70% above the 200dMA (7.02), 15% above the =
50dMA=20
(10.43) and 49.6% above the base low (8.01). It gets a =
yellow=20
flag for being 70% above the 200dMA according to WON's =
sell rule=20
#34, but does not get a red flag for the Rubberband Sell =
Rule.</DIV>
<DIV>-After the consolidation and breakout 12/18 the =
stock has=20
started to show signs of stress. This could easily be =
market=20
related, but no way to tell.</DIV>
<DIV>-1/2/02: New high on low volume. Red flag.</DIV>
<DIV>-1/10/02 & 1/11/02- two days with little or no =
price=20
progress on high volume. Red flag.</DIV>
<DIV>-With 1 yellow and 2 red flags I thought it worth =
doing a=20
PE Extension check. I've reconstructed the PE at the =
time of the=20
B/O in October using trailing EPS numbers for the prior=20
quarters. That puts it at $7.13/$.29 =3D 24.59. The =
extension=20
warning would then be a forward PE of 24.59*2.21=3D =
54.3. Let's=20
see. DGO doesn't have any estimates, which means it =
isn't=20
followed by enough analysts. I checked the internet to =
see if I=20
could find anything and ran across this EPS/Rev =
snapshot:</DIV>
<DIV> </DIV>
<DIV><A=20
=
href=3D"http://yahoo.marketguide.com/MGI/mg.asp?target=3D/stocks/companyi=
nformation/highlights&Ticker=3DELTE">http://yahoo.marketguide.com/MGI=
/mg.asp?target=3D/stocks/companyinformation/highlights&Ticker=3DELTE<=
/A></DIV>
<DIV> </DIV>
<DIV>I am alarmed by the essentially flat revenues over =
the last=20
4 years, so I am going to go with the EPS estimates in =
my=20
VectorVest software which reads a measly $.02. That puts =
the=20
current forward looking PE at $11.98/$0.02 =3D 599! I'll =
have to=20
mark that Red Flag.</DIV>
<DIV> </DIV>
<DIV>One note is that its industry is fairly healthy,=20
consolidating after rising, not overly extended and =
currently ranked in the 2nd quartile.</DIV>
<DIV> </DIV>
<DIV>I'll let you take it from there!</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; =
MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message =
- -----=20
</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; =
font-color: black"><B>From:</B>=20
<A title=3Dianstm@shaw.ca =
href=3D"mailto:ianstm@shaw.ca">Ian</A>=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, =
January 18,=20
2002 4:40 PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> =
[CANSLIM]=20
Katherine - Opinion please?</DIV>
<DIV><BR></DIV>
<DIV><FONT size=3D2>Would tuesdays distribution day =
for ELTE=20
make you exit the stock at this point? Do you have any =
other=20
insights into the chart?</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>I would appreciate your analysis - =
it is the=20
one big recent winner I am wondering what to do with. =
Based on=20
all of my past experiences, and knowing the companies =
outlook,=20
my gut tells me that it needs to consolidate =
here, but=20
will run into the $20's by mid-year. But I'd rather =
listen to=20
the chart. I fear I've held it long enough that I may =
be=20
complacent.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>Thank you.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT=20
=
size=3D2>Ian</FONT></DIV></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQU=
OTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BO=
DY></HTML>
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