June 12, 2003 Charles River Associates Incorporated (CRAI)
I saw this one and I thought it was the Towel maker. I guess that is James River or something....or was it James Taylor....lol.

O.K. so I am better at picking stocks than telling jokes and I should stick to it. Anyhow, I don't own any of these shares, have no plans right now to buy any and nobody in my family or stock club owns any that I know. In fact, I don't think I ever even heard of this company until 5 minutes ago!

CRAI "is an economic and business consulting firm that applies analytical techniques and industry knowledge to complex engagements for a range of clinents, including law firms, corporations and governments." Yikes, almost sounds like Arthur Andersen.

Charles River Associates had a GREAT day today and made the most-up list as well. It closed at $27.95 up $4.03 or 16.85%. In fact, after hours it is trading up another nickel. (But a nickel won't even buy you a candy bar these days.)

What drove the stock up was an EARNINGS report. If the three most important things in real estate are "location, location, and location" then in MY book, the three most important things for a stock investment is "earnings, earnings, and EARNINGS!"

Today, CRAI reported financial results for the fiscal 2003 second quarter ended May 16, 2003.

Revenues for the quarter increased 43.7% to $40.2 million compared to $28.0 million last year. Net income increased 40.9 percent to $2.8 million or $.30/share from $2.0 million or $.22/diluted share last year (2002). This is all from the NYTimes on the Web article. By the way the NYTimes site is a free site but you do have to register.

Checking Morningstar.com, we find steady revenue growth from $53.0 million in 1998, $74.0 million in 1999, $109.8 million in 2001, $130.7 million in 2002, and extrapolating (I love that word!) from the present quarter, assuming no seasonality, we can estimate about $160 million for 2003. Aren't these BEAUTIFUL numbers? Don't you just LOVE this company?

Free cash flow has been improving steadily, although the numbers are SMALL, the TREND is wonderful: $-1 million in 2000, $+2 million in 2001, $9 million in 2002 and $12 million in the trailing twelve months.

The company is very solvent per Morningstar with $23.7 million in Cash, $48.2 million in other current assets as opposed to $30.5 million in Current Liabilities. Long-term assets total $44.0 million compared to a miniscule $4.5 million in long term debt.

This stock trades at a trailing p/e of 28.52 and does not pay a dividend. If I had some free cash....I know the same old story....but HONESTLY...this is a beautiful picture and looks like a GREAT investment.

Goodnight again and keep those cards and messages coming at bobsadviceforstocks@lycos.com.

Bob