Dutton & Associates Announces Investment Opinion: Cap Rock Rating of Strong Buy Maintained By Dutton & Associates.Business Editors NOTE TO EDITORS: The following is an investment opinion issued by Dutton & Associates EL DORADO HILLS, Calif.--(BUSINESS WIRE)--Sept. 3, 2002 J.M. Dutton & Associates maintains a Strong Buy rating on Cap Rock Energy (AMEX AMEX See: American Stock Exchange :RKE) in its quarterly update report. The 12-month price target is raised to $17-$22, versus its recent price of $12.35. The 5-page report by J.M. Dutton senior analyst Michael Schmidt, CFA (Computer Fraud and Abuse Act of 1986) Signed into law in 1986, the CFA was a significant step forward in criminalizing unauthorized access to computer systems and networks. The Act applies to "federal interest computers" that include any system used by the U.S. , is available at www.jmdutton.com and from Zacks, First Call, Multex, and other leading financial portals. Cap Rock Electric, established in 1939, provides electric service to 34,000 customers in 31 counties in West Texas. In 1999, it converted from a cooperative to a Texas corporation (IOU IOU An abbreviation of the phrase "I owe you." Notes: An IOU in the business community is actually a legally binding agreement between a borrower and a lender. The terms of the loan are set out in a contract, and, once it's signed, the two parties must abide by the terms ) to enhance growth opportunities and facilitate raising capital. For 2002, revenues and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. are forecast at $74 million and $3.76, respectively, with a 2003 increase forecast to $75.8 million and $4.24, respectively. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become is forecast at $17.5 million in 2002, rising to $18.5 million in 2003. EPS estimates for 2003 assume Cap Rock's earnings will remain untaxed. Public peer valuation comparisons on either a P/E P/E See: Price/earnings ratio or market cap/EBITDA basis, suggest a significantly higher valuation for Cap Rock than our price target range even considers. We could easily project on a relative basis for this stock to trade at P/E multiples higher than the current level of 3.3x and a .2x current year's revenues. This would easily translate into a significantly higher stock price. We continue to rate the RKE shares a strong buy and have raised our 12-month price target to $17-$22 based on both relative and absolute measures. Schmidt is a member of the Financial Analysts Society of South Florida. His background includes analyst/portfolio management positions with Northern Trust and Mellon Bank, and institutional consulting with Mercer Consulting in Chicago. His 15 years of experience include coverage of multiple sectors and industries including energy, healthcare, consumer, and finance. Michael received his Bachelor of Science Noun 1. Bachelor of Science - a bachelor's degree in science BS, SB bachelor's degree, baccalaureate - an academic degree conferred on someone who has successfully completed undergraduate studies degree in Finance from Northern Illinois University and an MBA from Loyola University of Chicago Loyola University of Chicago, at Chicago; Jesuit; coeducational; est. 1870 as St. Ignatius College, present name adopted 1909. It has a liberal arts college and a graduate school, as well as schools of medicine, dentistry, nursing, social work, law, business . About Dutton & Associates Dutton & Associates is one of the largest independent investment research firms in the U.S. Its 18 senior analysts, primarily CFAs, have expertise in many industries including healthcare, technology, finance, banking, mining, gaming, and energy. Dutton & Associates provides economically bias-free, continuing analyst coverage of enrolled companies, and its institutional-quality research, estimates, and recommendations are carried in all the major databases serving institutions and online investors. The cost of enrollment in the Dutton & Associates one-year continuing research program is US $25,000 prepaid before commencement of its research activities. Dutton & Associates does not accept payment of any of its fees in company stock. Its principals and analysts are prohibited from owning or trading in securities of covered companies. Please read full disclosures at www.jmdutton.com before investing. |
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