ORLANDO, Fla., May 25, 2007 (PRIME NEWSWIRE) -- RedChip Independent, a division of RedChip Companies, Inc., announced today that it has initiated research on Empire Financial Holdings, Inc. (AMEX:EFH).
Joe Blankenship, MBA, CFA Level I Candidate, RedChip Research Analyst, wrote in the report:
"With its recent capital raise, EFH has enough cash to aggressively expand all of its business efforts, particularly the broker dealer business, for which the net capital rule applies.
"When we annualize the revenue results of the Jesup acquisition and also provide for internal growth from both organizations, we see dramatic growth for FY2007. It is our opinion that this growth can leverage operating expenses such as G&A and information systems to improve margins. We have estimated an operating margin of 3.4 percent for FY2007, improving to 5.8 percent for FY2008.
"The margin improvement can provide earnings per share in the area of $0.12 for FY2007 and $0.24 for FY2008. With demonstrated profitability, we believe the Company's stock should demand a slightly higher multiple than other regional broker dealers. We have applied a multiple of 18.7 times our 2008 estimate of diluted EPS to arrive at our 12-month price target of $4.50. We believe that this represents a reasonable expectation for a growing business, with experienced management that has demonstrated the ability to diversify revenue sources and provide revenue expansion. We are initiating coverage with a BUY recommendation."
To receive a complimentary copy of the RedChip Independent initiation research for EFH, please visit: http://www.redchip.com/independent/subscriber.asp?page=requestEFH_initial.
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RedChip Independent Research Disclosure
The analysts contributing to this EFH RedChip report do not hold any shares of EFH. Additionally, the analysts contributing to this report certify that the views expressed herein accurately reflect the analysts' personal views as to the subject securities and issuers. RedChip certifies that no part of the analysts' compensation was, is, or will be, directly or indirectly, related to the specific recommendation or views expressed by the analyst in the EFH RedChip report. Additional information on the securities mentioned in this report is available upon request. This EFH RedChip report is based on data obtained from sources we believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. As such, the EFH RedChip report should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed herein are subject to change. EFH is not a client of RedChip Companies, Inc., or any of its affiliates.