BUSINESSWEEK ONLINE : OCTOBER 13, 1997 ISSUE
INSIDE WALL STREET

J.W. Charles: It's Eat Or Be Eaten

Buyout fever is rampant on Wall Street, and shares of major financial houses--Lehman Brothers and PaineWebber, for instance--are on fire. But small-cap brokerage firms have yet to heat up. A case in point: Stock of J.W. Charles (JWC) in Boca Raton, Fla., is stuck in the 8-to-10 range.

''In light of the consolidation in the industry and the company's profitability, it's likely J.W. Charles is on the radar screen of larger brokerage houses seeking acquisitions,'' says Robert Goldstein, president of Equity Group and owner of 8% of J.W. Charles stock. One analyst says the company rebuffed an informal approach by a regional brokerage earlier this year and is now being wooed by a securities company based in the Northeast. Other big holders: FMR and one of its funds, Fidelity Low-Priced Fund. J.W. Charles caters to high-net-worth individuals. Goldstein expects the company to produce revenues of about $100 million this year, up from 1996's $91 million.

The company's stock is selling at a p-e of 5, based on estimated 1997 earnings of $1.50 a share and $2 in 1998, up from $1.27 in 1996. Vice-Chairman Joel Marks says it is seeking to acquire another brokerage firm for faster growth. ''We have to. Otherwise, we'll end up being gobbled up.''

 


BY GENE G. MARCIAL

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