BUSINESSWEEK ONLINE : NOVEMBER 30, 1998 ISSUE
INSIDE WALL STREET

Miami Computer's Sales Head North

Miami Computer Supply (MCSC) isn't in Florida (it's in Dayton), and it doesn't sell computers. It sells 1,800 mundane items--such as computer tape cartridges, diskettes, and printer ribbons--to small businesses. What distinguishes Miami Computer is its sales, which have more than tripled in a year, to $325 million. And net income has jumped from $2.2 million in 1997 to an estimated $7.2 million this year. Little wonder that Miami's stock has climbed from 8 1/2 on Dec. 16, 1997, to 19 1/2 on Nov. 17, 1998. Has Miami hit its peak?

Far from it, says Elliott Schlang of Lynch, Jones & Ryan, a research boutique in Cleveland, whose 12-month target for the stock is 32. He is encouraged that 49% of the stock is owned by insiders, who keep buying.

Schlang thinks Miami will be able to sustain its growth through internal expansion and acquisitions. In the past five years, earnings have grown at a compounded yearly rate of 20%--through internal growth. Counting acquisitions, Miami has grown at 56% a year, notes Schlang. Among this year's six buys is Canada's Axidata, with annual sales of $150 million.

Miami CEO Michael Peppel says the deal will push up earnings as ''it opens up Canada to our products.'' The company will ''continue to make acquisitions as long as they are accretive to our earnings,'' says Peppel, who sees at least one more buy before yearend. Analysts figure Axidata will add 5 cents a share to Miami's earnings in 1999. Schlang figures Miami will earn 63 cents a share this year and 79 cents in 1999 (excluding Axidata), up from 39 cents in 1997.

BY GENE G. MARCIAL

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