]> SA Advisory

S. A. Advisory's Undervalued Hotline
1-900-990-0909 Ext. 192

An overlooked pollution control story that offers investors a textbook fundamentally cheap investment opportunity.
ABATIX Environmental Corp. (NASDAQ ABIX) Recommended @ $3.50/share on July 20, 1995 via our 900# service - current price $3.875. Abatix Environmental Corp. is a full-line supplier to the asbestos abatement, hazardous materials, industrial safety and construction tool industries. The company has eight distribution centers and employes 65. The company serves customers throughout the Southwest, Midwest and Pacific Coast.
. Upon review of select financial data, it should be easy to conclude that every year since 1993 to the present calendar year, as well as estimated values for 1996E, that ABIX keeps growing and growing and growing and the stock price continues to get cheaper and cheaper and cheaper. From 1992 to 1996E revenues have grown from 11.6 million to an estimated 31.2 million for an average growth rate of 30% (Note: 1995E and 1996E alone do not show this rate of growth, but according to management this is temporary. The big picture is impressive). The book value for 1993, 1994, 1995E and 1996E, respectively, also shows very positive results, that is, $1.57, $1.67, $2.04 and $2.53 - an overall gain of 61%. 1996E, our share valuation would be $6.00 and $6.75, respectively, not the current $3.75.
Another important fundamental variable that to many is the most important, that being PE, also demonstrates that ABIX is a very cheap and undervalued situation. Upon examining PE valuations from 1993 and 1996E, respectively, our calculations indicate ABIX being valued quite handsomely at 55x during 1993 to 27.1 during 1994 and now 8.9x and 7.0x, respectively during 1995E and 1996E. Since near team growth rate has slowed with respect to prior years and, of course, the industry is somewhat out-of-favor and net income percentage of revenue is only 3.75%, we believe that a PE valuation of at least 13x would be a conservative number to consider. If we use this value and base it upon 1995E and 1996E earnings estimates, then ABIX would trade at $5 7/16 and $6.87, respectively.
In addition to the fundamental variables that most definitely indicate a cheap and undervalued situation, investors should not overlook that ABIX has no long-term debt, has been aggressively buying back ABIX shares on the open market, that there are only 1 million shares in the public float (management controls 55%) and management has over 25 years of combined distribution experience. Abatix Environmental can be followed daily in the WSJ and trades on the NASDAQ National Market System.
Overall, we view ABIX as an excellent long-term investment opportunity with little downside risk due to strong underlining fundamentals. We believe that ABIX belongs in portfolios geared toward emerging growth opportunities that prefer less risk and appealing upside potential during the next 6 to 18 months. We intend to monitor 3,000 shares in our $100,000 master low priced portfolio and our 900# portfolio.
For more information call Frank Cinati at 214-381-1146. Broker contact: Mike Chesler at 1-800-331-1355.

ABIX Select Financial Data - Year End Dec. 31 
					   6 mos June 30
			1992	1993	1994	1994	1995	1995E	1996E
Revenue			11.6 mil	19 mil	26 mil	12.9 mil	13.7 mil	27.5mil	31.2mil
Income from continuing	.01	.12	.25	.11	.21	.42	.53
Loss from discontinued	(.02)	(.06)	(.16)	(.04)	--	--	--
Accounting change	--	.01	--	--	--	--	--
Net income/sh		(.01)	.07	.09	.07	.21	.42	.53
Shares outstanding (mil)	2,074	2,304	2,330	2,330	2,261	2,261	2,300
Book value		$1.46	1.57	1.67	1.67	1.83	2.04	2.53
P/CF-price to cash flow	NA	29.91	10.82	NM	NM	6.73	5.64
PSR - price to sales	NA	.46	.21	NM	NM	.30	.27
PE-price to earnings	NM	55.3x	27.1x	NM	NM	8.9x	7.0x
NA= not available, NM= not meaningful
Note: 1. During 1993 an average share value of $3.875/share was used for P/CF, PSR and PE valuation. 
2. During 1994 an average share value of $2.44/share was used for P/CF, PSR and PE valuations.
3. For 1995E calculations  we intend to use a $3.75 valuation for all calculations.
4. For 1996E calculations we intend to use a $3.75 valuation for all calculations: P/CF, PSR and PE.
5. PE value is based upon net income/share
Long term debt = Zero 	

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