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The Target Portfolio Headline
Update for Friday, September 17, 1999:
N U Pizza Holding Corp (OTC BB:NUZA)
Sometimes a unique situation appears and we will take advantage of this. Based on our past performance in these types of situations we will continue to look for the stocks that meet our criteria.
Magicpizza.net the newest Internet Craze
12 month target $1.00-$1.25
We are doubling our position
Another opportunity to cash in on the Internet craze. N U Pizza Holding Corp. is in the process of unveiling magicpizza.net. This concept is nothing new in Corporate America but is new in the pizza industry. magicpizza.net will offer consumers the ability to order pizza over the Internet or through an 800 number. The company will then route the order to the local pizza parlors whom they have signed. The concept is no different than that of 1800 Flowers.com.
The Core Business
In July the first Numero Uno Magic Pizza was opened in Northridge. The store is exceeding initial projections and will have positive cash flow in September. Three additional stores should be opening over the next 90 days.
All new NUZA units in California will be known as Numero Uno Magic Pizza featuring
a new "New York" style thin pizza in 14" and 16" sizes, new Magic Pizza in 14" and 16" sizes and the traditional Numero Uno thick, which has a 16" addition. It also features a limited pasta, salad and sandwich menu and new "Italian Style" rotisserie chicken. New supplier contracts have enabled the company to keep menu prices are substantially lower than all competitors.
Growth in California will occur through three vehicles: dual concept units and express units that can be either joint ventures or franchises; and licensed branded units.
Dual Concept Unit:
Numero Uno Pizza and Salsa Fresh Grill have entered into a cross license agreement allowing both parties to franchise or own and operate the other's concept in conjunction with its own. The two concepts' will substantially increases the unit's overall volume without increasing overhead, labor or marketing cost. The result: higher probability of success, higher volume, higher profit.
There are two dual concepts currently under development: one will be owned and operated by NUZA and one by Salsa Fresh, Inc. The NUZA unit is scheduled to open in September and SFI's in October.
Express Units:
Concentrate on delivery and takeout with limited seating inside.
Branded/Licensed Units:
NUZA will license independent restaurant operators to sell Numero Uno Pizza out of their location. The initial license will be free, but, the operator must allow Numero Uno to control advertising and take and dispatch orders. NUZA will provide them at no charge with the - equipment he needed to provide our products and will provide free advertising for the first three months.
These units will be located within a cable zone in areas where Numero Uno is unable to position a dual concept or express unit. The purpose being to fill in the gaps in the cable zones to maximize reach, coverage, service and reduce cost.
Joint Venture vs. Franchise
Owned units generate more revenue for the company. However, the problem in today's market is hiring qualified management people at reasonable salaries. There are however thousands of restaurant management people who would love to own their own business but either can't afford it or no opportunity is available. Numero Uno offers these people the opportunity and affordability. NUZA gets an equity-managing partner who knows the business, is skilled and will work his tail off because he's an owner. It gives Numero Uno virtually an unlimited labor pool, and a proven hard working, motivated manager who shares the risk with us.
This is a very exciting situation and we believe NUZA will generate over $10,000,000 in revenues in the fiscal year 2000 and over 22,000,000 in fiscal 2001.
Our 12 month price target is $0.50 based on our initial findings.
KAIRE Holdings Inc., (�KAIRE�) NASDAQ OTC: (KAHI)
We are reiterating our buy recommendation on KAHI. Their internet business model is solid and we believe the company will begin their on-line pharmacy in september. Technically the stock looks good. Volume remains positive and the price has held nicely. Our 12 month target remains at $2.00.
We have also taken position in the following. These positions are based maily on technicals. Each of these stocks has benn beaten down and are ripe to make big moves from here.
We have doubled our position in CMGI. We love this stock as seen in past buys. We believe a price of $100 per share over the next 60 days is achievable.
Sold 1,000 shares of NETA at $20. After a nice 4 point move we see some resistance building.
Our portfolio was designed to trade both small and large stocks. Although we are not bound to any types of equities, we generally only carry one penny stock with a limit of 15% to 20% of the portfolio value in any penny stock.
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