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Author: zanman2 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 28  
Subject: Short-term opportunity Date: 4/15/1999 2:44 PM
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I'm not a short term investor, but I think that FRDM has got potential for a burst upward in the next few weeks. Earnings forecasts for 2Q '99 (the quarter ending March 31) only call for earnings of about $.14 per share (highest estimate is $.16 per share). However, the company announced about a week and a half ago that revenues for the second quarter are up 25% from 2Q '98, and that same store sales ("comps") are up an amazing 16% from last year. FRDM earned $.18 a share in 2Q '98; it therefore seems to me that earnings for 2Q '99 are going to probably be in excess of last year's performance, and very likely in excess of even the most optimistic estimates for the quarter.

Assuming margins have stayed constant, the projected earnings for 2Q '99 would be about $.23 per share, based on last year's performance and the revenue growth. Strong comps usually indicates an improvement in margins (more volume going out of the same store, same fixed cost base). If there is even modest margin improvement that could improve earnings out to $.25 per share, nearly double the current First Call consensus. The earnings announcement should come out later this month. Hopefully the second straight strong quarterly performance (FRDM beat estimates last quarter, earning $1.10 compared with estimates of, I believe, $1.01) will give the stock a shot in the arm.

Let me disclose: I am long FRDM. But I think this is a good story; is there anybody else out there investing in this stock? What do you think?

Zan Man
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Author: ceo619 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10 of 28
Subject: Re: Short-term opportunity Date: 5/16/1999 4:46 PM
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The problem with your optimistic assessment is that all of the wonderful sales increases are based on credit sales. Until they show they can manage credit with lower income customers without resorting to massive write-offs every 2 years when the debt becomes uncollectable, they will have a credibility problem, especially since they have taken investors down this path once before.

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