News today!
The sleuths at GoldRush have uncovered a classic merge and conquer scenario in the $200 billion dollar Direct Response Marketing industry. The conqueror-to-be is BMII, Blagman Media International. The new company will combine the talents and clients of three of the biggest names in the infomercial world under the Blagman name. The time to buy the stock is now, while BMII is still an OTC stock. Once the Street finds out who's coming under the BMII umbrella, this stock is going vertical!
Strong Buy Recommendation
Blagman Media International Inc
OTCBB : BMII
Current Price: $0.16
Target Price: $2.00
BMII is one of the country’s most respected direct response and marketing ad agencies. BMII has enjoyed double digit annual growth since its inception six years ago. The principal business of BMII is media buying, with a specific focus on direct response advertising. The company plans rapid expansion through acquisition of other direct response firms which cater to various niches within the industry. Clients have included Proctor & Gamble, Kodak, Daimler-Chrysler, Black & Decker, Home Shopping Network and TriStar.
Great short term potential
We have picked up strong rumors that BMII is going to have a number of important news releases about future acquisitions. These acquisitions could easily double or triple the value of the company. It is essential to buy before these news releases, as the stock price could go up sharply when news gets out.
Because of the low price and the impending news releases, BMII can be considered a strong momentum play over the next couple of days. A month ago BMII went from $0.10 to $0.50 in a few days. We think BMII is ready to go up again and probably higher.
BMII is also a very attractive long term investment.
Attractive long term investment
According to the Direct Marketing Association, direct marketing expenditures, currently $191 billion, are expected to continue to grow by 7.1% annually until 2005. Sales revenue attributable to direct marketing is estimated to reach more than $1.8 trillion during 2001. Until 2005 such sales are estimated to grow by 9.6% annually to reach $2.7 trillion.
The current price reflects sales of $12 million for the old Blagman Media only. After the company's acquisition strategy, the new BMII will generate an additional $175 million in sales. Even at a modest P/E ration of 2 to 1, this translates into $5 per share by the end of this year.
Total revenues for the new BMII are expected to be $187 million in FY 2001, and nearly $227 million in FY 2002. By FY 2005 forecasted billings surpass $361 million.
Conclusion
CEO Robert Blagman understands the Infomercial sector. The primary purpose of BMII going public was to create a vehicle with which to build a media-buying infrastructure. BMII will streamline operations, combine miscellaneous expenses, and create synergies within this larger structure to increase economies of scale and lower costs-per-eyeball for their clients.
We believe BMII has huge upside potential in the exciting Infomercial market. We believe this acquisition strategy is going to have a major impact on the value of this extremely undervalued company. We rate the stock a strong buy and give it a target of $2. BMII is your portfolio savior for 2001.
muel <ggg>
