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Technology Stocks : BancTec (BTC: NYSE): the most Undervalued Software Stock
BTC 57,125-1.9%4:59 PM EST

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To: sam song who wrote (8)11/2/1997 6:46:00 PM
From: mike zeltser  Read Replies (1) of 11
 
Great buy at current price.

P/E= 13.5 on 1997 EPS
11.0 on 1998 EPS

Cash flow of $80 million or about $4 per share.
Free cash flow of $40 million or about $2 per share.

Company is actively buying shares in the market.

The company easily has the resources to complete its buyback program of 2 million shares (or about 8% of total shares outstanding), which at today's price costs $46 million, which is about what the company is generating in free cash flow. This is a wise use of funds as it significantly reduces the share count and boosts EPS.

The company's recapitalization effort seems wise. Retiring convertible debt and bank credit facilities and replacing them with public/private note issuances not only reduces interest costs but also shrinks the fully diluted share count by some 8% (not bad!).

The business is OK but the company continues to come up slightly short on projections, although earnings and revenues appear very steady.

My only question is about prospects going forward. Does anyone know how the company plans to grow, who their main competition is, and what management plans to do to improve profitability?

Any intelligent posts would be greatly appreciated.

Thanks in advance.

Mike
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