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DANKA BUS ADR Message Board

  • fuzzhead72 fuzzhead72 Apr 8, 2007 4:28 PM Flag

    Why is Kiplinger's recommending this stock?

    I just read an article in the latest Kiplinger's magazine where "small company specialist Warren Isabelle" recommends DANKY as a small, obscure bargain. Evidently his reasons for liking the stock are because the company has pared debt, brought in a turnaround specialist to run the firm, and the stock's market value is only 10% of annual sales.

    Ok, so I figured that was worth looking the stock up.
    When I did so, I found the following:

    A stock price hovering just a bit over $1
    Operating cash flow NEGATIVE 26M
    Total cash 33M
    Debt of 255M
    Debt/Equity ratio of 17.9
    and a book value of negative $5.03 per share

    Now, pardon me if I'm not all that excited about the stock. Any time I find one down around $1, that seems really risking to me, considering the possibility of delisting.

    Second, they have a current debt of $255 million. The interest they have to pay on that alone must be about $25 million a year. Plus, they are losing $26 million a year in ongoing operations.

    If I'm doing the math right, this means they are losing about $50 million a year, on receipts of about $800 million a year.

    Why would I invest in this company? Seriously, I must be missing something that Mr. Isabelle saw, because he thinks the stock might double in the next year. I'm having a hard time seeing how this thing will even avoid bankruptcy, or getting delisted.

    Could someone out there please enlighten me to the positive aspects of owning this stock? Thanks!

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    • Oce does not manufacture a complete product line, therefore needing alternative products... Canon has already stated they will cut off gisx with new equipment beating xrx to the punch. a pissing war of sorts... which major manufacturer will be next..??? xrx did not spend 1.5 billion to sell competetive products!!!!! Period!

    • OK !I'm convinced...Jonathon is a Danka employee..same puck knuckle I met a year ago...who else would know about Sharp so well, besides an insider. You are more than a dispassionate investor, Jonathin. Mini-Pit Bull ?...lmfao. are right on the money with your commentary.
      This would be the classic scenario for most of the copier mopes out there peddling there ME TOOS !! NO SERVICE !!

      Like Danka who pulled out ofgood markets and re-entered only to hear customers YAWN !!

      They have noved on to more reliable companies. Dealers are irrelevant as the GISX deals shows and that consolidation is coming faster and direct operations are the wave of now and the future. Dank as a dealer has little relevance. And don't say Ikon. They OBVIOUSLY have a grip on reality. They are making money. Something Danka is incapable of doing. AGAIN, I am certain the 4th QTR will look like dog sh*t.

      Save the Sharp comments for something more germain, Jonathon.And quit BSing a BSer. I know the difference.

    • makin_a_long_story_short makin_a_long_story_short Apr 12, 2007 10:30 AM Flag

      Cali contract... don't talk to the dealers supporting this... Sharp gets the copier revenue, the dealers are stuck with the skinny service margins. Service has suffered because the state has/is buying tons of gear... the increased service base has out stripped the ability to service properly, forcing the hiring of additional techs to service (in many cases) money losers... some dealers are now balking at honoring the CSSI agreement... giving away equipment, to have the service side suck, is NOT a smart business plan... so ya seed the market, only to destroy your rep' and credibility... nice....

    • while not a competitor, Sharp - who dropped off the map a few years ago has been staging a great comeback - landing the State of California contract was a huge coup for them and quite honestly the new equipment is marginally decent.

      Apparently there's been a big time budget increase to explain the comeback, seems like they may be the mini-pit-bull that could.

    • makin_a_long_story_short makin_a_long_story_short Apr 11, 2007 7:35 PM Flag

      BTW Puck Knuckle... Oce sells other MFG's stuff, nothing changed when they bought Imagistics... so go do your homework kiddo... it does happen...

    • makin_a_long_story_short makin_a_long_story_short Apr 11, 2007 5:11 PM Flag

      Ahhhhh... so helmet head... Xerox will not service all these customers?... they will not order parts or supplies for them either?... yeah, right... in theory, over time, the goal will be to convert them to xerox products, but until such time it will be business as usual, AND... the deal is not even done yet... so until the ink is dry nothing will change... can you understand this?

    • sharp is not a competitor to xerox?

      they will sell only xerox!!!!

    • The link to recommendation

      Isabelle favorites: Small, obscure bargains
      In the 1990s, says Warren Isabelle, Danka Business Systems (symbol DANKY) went on a "wacko acquisition binge and got indigestion." Danka has sold off its European operations, pared debt and brought in a turnaround specialist to run the firm. And the stock's market value of $100 million is a mere 10% of annual sales.

    • The company has the money now to pay off almost all of its debt, but has a huge amount of preferred stock which leave the common stock with little value. Mr. Isabelle, like others in his situation, likes to use the press to pump up his holdings. He will no doubt be selling and Kiplinger readers are buying.

      • 1 Reply to joelxyz58
      • The only reason I recently picked up some, and let me stress it's simply a gut feeling is that there is no way the Japanese manufacturers will sit back and let a competitor like Xerox acquire a company like GISX in order to expand market share when the Japanese companies, (Ricoh, Canon, Konica-Minolta) have been doing the same thing over the past few years.
        DANKY already sold off their Europe operations to Ricoh and Latin American division to Toshiba.

        DANKY and IKN are the only two national dealer players left, I'm hoping its only a matter of time.

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