Re: [CANSLIM] DLX?

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] DLX?
Date: Tue, 26 Mar 2002 17:25:55 -0600
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Hi Mona,

Your note piqued my curiosity--I haven't read the Baron's article, so =
instead took a look through DLX's 10K filed just today. While they only =
have $10m long-term debt, which would account for their low D/E of 3%, =
they have an enormous short term debt with minimum cash commitments as =
of 12/31/01 of $153m. This, for a company with $9.5m cash on the books =
as of year end and cash from operations in 2001 of approx $270m. The =
read on their 10K also shows this is a company that has flat to falling =
revenues and has been squeezing additional earnings by controlling SG&A =
expenses--not exactly the makings of an =
innovative-high-growth-CANSLIM-quality company. As an aside, they also =
spun off EFDS in late '99. Without digging, I'm not sure of their =
residual ownership, but EFDS has recently been the subject of an SEC =
"informal inquiry" on 2001 financials. (Also, a good portion of the =
$153m cash obligations has to do with commitments to EFDS) If DLX needed =
to borrow against their credit line to meet any of these upcoming cash =
obligations, the additional interest expense would have an adverse =
effect on their EPS in upcoming quarters.

Katherine
  ----- Original Message -----=20
  From: Mona Guarino=20
  To: canslim@lists.xmission.com=20
  Sent: Tuesday, March 26, 2002 7:31 PM
  Subject: RE: [CANSLIM] DLX?


  Katherine, thanks for the info. I hadn't bought DLX, but it was coming =
up on my screens. I screen for high EPS/RS and require accelerating EPS =
for 3 quarters. DLX appears in a short list from that screen. The debt =
shown on the weekly chart is only 3%. I own things like DRI and AMAT =
with much higher debt than that, so DLX's 3% didn't bother me.=20


    -----Original Message-----
    From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
    Sent: Tuesday, March 26, 2002 1:28 PM
    To: canslim@lists.xmission.com
    Subject: Re: [CANSLIM] DLX?


    Hi Mona,

    From a CANSLIM perspective, DLX never makes my short list because of =
its low forward growth rate of 3% and low QoQ EPS/Rev growth rates. =
Nonetheless, its been a trooper during the Bear and may just be due for =
some consolidation of the lengthy upmove.

    Here's a recent Briefing.com article:
          23-Feb-02=20
          10:21 ET Barron's stock screen for high debt burdens (OPENX) : =
Barron's reports on a stock screen which looked for companies with the =
highest percentage of long-term debt coming due in the next year =
relative to capital; we rank them in order of the company's credit =
rating, from lowest rated to highest -- companies with same ratings =
grouped together: (EIX), (MDR), (XRX, DCN), (AV, BCC, ODP), (DG, DPH, =
VC), (TUP, SV, TYC, CA, PCS, FON, GDT), (TJX, CEG, NWL, AHP, T), (CSC, =
CAT, FPL, CCE), (DLX, UL), (G, PG), (FRE).

          --Katherine=20

      ----- Original Message -----=20
      From: Mona Guarino=20
      To: canslim@lists.xmission.com=20
      Sent: Tuesday, March 26, 2002 6:08 PM
      Subject: [CANSLIM] DLX?


      Was there news on DLX today?

      It broke it's lower channel line and it's 50-day.



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<DIV>Hi Mona,</DIV>
<DIV>&nbsp;</DIV>
<DIV>Your note piqued my&nbsp;curiosity--I haven't read the Baron's =
article, so=20
instead&nbsp;took a look through DLX's 10K filed just today. While they =
only=20
have $10m long-term debt, which would account for their low D/E of 3%, =
they have=20
an enormous short term debt with minimum cash commitments as of 12/31/01 =
of=20
$153m. This, for a company with $9.5m cash on the books as of year end =
and cash=20
from operations in 2001 of approx $270m. The read on their 10K also =
shows this=20
is a company that has flat to falling revenues and has been squeezing =
additional=20
earnings by controlling SG&amp;A expenses--not exactly the makings of=20
an&nbsp;innovative-high-growth-CANSLIM-quality company. As an aside, =
they also=20
spun off EFDS in late '99. Without digging, I'm not sure of their =
residual=20
ownership, but EFDS has recently been the subject of an SEC "informal =
inquiry"=20
on 2001 financials. (Also, a good portion of the $153m cash obligations =
has to=20
do with commitments to EFDS) If DLX needed to borrow against their =
credit line=20
to meet any of these upcoming cash obligations, the additional interest =
expense=20
would have an adverse effect on their EPS in upcoming quarters.</DIV>
<DIV>&nbsp;</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=3Dwebmaster@design21.com =
href=3D"mailto:webmaster@design21.com">Mona=20
  Guarino</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> Tuesday, March 26, 2002 =
7:31=20
  PM</DIV>
  <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: [CANSLIM] =
DLX?</DIV>
  <DIV><BR></DIV>
  <DIV><SPAN class=3D490400001-27032002><FONT face=3DArial =
color=3D#0000ff=20
  size=3D2>Katherine, thanks for the info. I hadn't bought DLX, but it =
was coming=20
  up on my screens. I screen for high EPS/RS and require accelerating =
EPS for 3=20
  quarters. </FONT></SPAN><SPAN class=3D490400001-27032002><FONT =
face=3DArial=20
  color=3D#0000ff size=3D2>DLX appears in a short list from that screen. =
The debt=20
  shown on the weekly chart is only 3%. I own things like DRI and AMAT =
with much=20
  higher debt than that, so DLX's 3% didn't bother me. =
</FONT></SPAN></DIV>
  <DIV><SPAN class=3D490400001-27032002><FONT face=3DArial =
color=3D#0000ff=20
  size=3D2></FONT></SPAN>&nbsp;</DIV>
  <DIV><SPAN class=3D490400001-27032002></SPAN>&nbsp;</DIV>
  <BLOCKQUOTE dir=3Dltr=20
  style=3D"PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #0000ff 2px =
solid; MARGIN-RIGHT: 0px">
    <DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
    size=3D2>-----Original Message-----<BR><B>From:</B>=20
    owner-canslim@lists.xmission.com=20
    [mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of =
</B>Katherine=20
    Malm<BR><B>Sent:</B> Tuesday, March 26, 2002 1:28 PM<BR><B>To:</B>=20
    canslim@lists.xmission.com<BR><B>Subject:</B> Re: [CANSLIM]=20
    DLX?<BR><BR></FONT></DIV>
    <DIV>Hi Mona,</DIV>
    <DIV>&nbsp;</DIV>
    <DIV>From a CANSLIM perspective, DLX never makes my short list =
because of=20
    its low forward growth rate of 3% and low QoQ EPS/Rev growth rates.=20
    Nonetheless, its been a trooper during the Bear and may just be due =
for some=20
    consolidation of the lengthy upmove.</DIV>
    <DIV>&nbsp;</DIV>
    <DIV>Here's a recent&nbsp;Briefing.com article:</DIV>
    <DIV>
    <TABLE cellSpacing=3D0 cellPadding=3D4 width=3D"100%" border=3D0>
      <TBODY>
      <TR>
        <TD class=3Ddate>23-Feb-02</TD></TR>
      <TR>
        <TD vAlign=3Dtop>
          <DIV><B>10:21 ET Barron's stock screen for high debt burdens=20
          (OPENX)</B> : Barron's reports on a stock screen which looked =
for=20
          companies with the highest percentage of long-term debt coming =
due in=20
          the next year relative to capital; we rank them&nbsp;in order =
of the=20
          company's credit rating, from lowest rated to highest -- =
companies=20
          with same ratings grouped together: (EIX), (MDR), (XRX, DCN), =
(AV,=20
          BCC, ODP), (DG, DPH, VC), (TUP, SV, TYC, CA, PCS, FON, GDT), =
(TJX,=20
          CEG, NWL, AHP, T), (CSC, CAT, FPL, CCE), (<FONT=20
          color=3D#0000ff>DLX</FONT>, UL), (G, PG), (FRE).</DIV>
          <DIV>&nbsp;</DIV>
          <DIV>--Katherine</DIV></TD></TR></TBODY></TABLE></DIV>
    <BLOCKQUOTE=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=3Dwebmaster@design21.com =
href=3D"mailto:webmaster@design21.com">Mona=20
      Guarino</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> Tuesday, March 26, =
2002 6:08=20
      PM</DIV>
      <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] =
DLX?</DIV>
      <DIV><BR></DIV>Was there news on DLX today?<BR><BR>It broke it's =
lower=20
      channel line and it's 50-day.<BR><BR><BR><BR>-<BR>-To=20
      subscribe/unsubscribe, email "<A=20
      =
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In=
=20
      the email body, write "subscribe canslim" or<BR>-"unsubscribe=20
      canslim".&nbsp; Do not use quotes in your=20
email.</BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>

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