NEW YORK, March 1, 2004 (PRIMEZONE) -- (Investrend Research Syndicate) Providential Holdings, Inc. (OTCBB:PRVH) has been rated "Speculative Buy" by Investrend Research analyst Mohammad Sharifzadeh, MBA, CFA in a new initiating report.
The company, which holds 13.5% of Nettel Holdings (OTCBB:NTTL), and 1.9 million shares of Lexor Holdings Inc. (OTCBB:LXRH), plus interests in a number of private companies, "has managed to establish a diversified holding of businesses with qualified management," according to Sharifzadeh in his report, which is at http://www.investrendresearch.com.
"One of the company's fully owned subsidiaries, Providential Capital, has been generating revenues since June quarter of 2003 and four other subsidiaries started to bring in revenues in December of 2003. Should this prove to be a sustainable revenue stream in the future, the stock price will be positively affected."
On the other hand, Sharifzadeh points out the company is still carrying negative working capital and negative stockholders' equity in its books, and its "cash requirements for operating activities are still procured through financing sources."
He noted that although Providential Capital, "and in the most recent quarter, Provimex and PHI Digital have been bringing in revenues, it is still not possible to conjecture a sustainable stream of future revenues for the company. Therefore, it is not possible to use past performance of the company and historical financial data to project future earnings," thus "it is not possible at this stage to come out with a value target for the stock or an intrinsic value estimate of the company."
Sharifzadeh concluded that despite its tight financial stance, "Providential has been able to continue its reorganization plans and through a mixture of financial restructuring and revenues earned has managed to reduce the stockholders' deficit from around $6 million in June of 2002 to about $2.2 million by December of 2003. Concluding conversion of the major portion of convertible notes into common stocks of the company has been a positive step in the right direction.
Management is very positive about the future of the company and the subsidiaries. They anticipate over $72 million in revenues and about $20 million in net income for fiscal 2004; particularly they expect PHI Digital to achieve revenues of 15 to 20 Million dollars per year."
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