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I am long this company. I own it around $15/sh. and am naturally disappointed about the recent performance. However, I have noticed what I believe to be a significant positive development over the 6 to 8 weeks.
According to the IBD, this stock was owned by 28 mutual funds at the begining of December. Share price at that time was about $21. As of today (1/27/98), there are 36 mutual funds that own this stock. So, during the month of December and then moving into early January, while the stock price declined from $21 to under $10, 8 new institutions opened long positions. Even though November and December "comps" were off, net sales are increasing, and we still have a reasonably clean balance sheet. The current management team owns about 11% of the stock, and has navigated a near incredible 2 year run. I think their true test is in front of them because they are now facing tougher comps. With a P/E of 8, and an industry average P/E of approx. 20 - 22, I think this stock, although not without its potential problems, represents a reasonably good value at the current price.
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