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Mercer International has gone a long way since its start in 1968 as a real estate investment trust in Massachusetts. It recently shed its REIT business and has redirected its focus overseas, to Germany, where it aims to be big in environmental cleanup. These changes, including possible plans to sell its remaining financial-service operations, have its stock rising: It's up to 7 1/4 a share from 4 in October.

"The stock is terribly cheap, based on the present management's buildup of the company's income base," says investment adviser Andrew Brichant of Howard Bronson. He sees the stock leaping to 15 a share, based on his 1992 earnings estimate of $1 a share, up from an an expected 75~ cents in 1991 and 1990's 54~ cents. His 1992 earnings number doesn't take into account what Mercer will reap from cleanup operations, which will be concentrated largely in eastern Germany.

Mercer Vice-Chairman Bill Atkinson figures that the German operation alone should kick in sales of $20 million this year and $38 million in 1993, bringing total revenues to $105 million in 1992 and $150 million next year. Mercer acquired a German environmental-services company last year.

Rumors are that Mercer is in talks with some companies about selling its financial-services assets, including a Canadian insurance company, worth about $34 million. Mercer will keep its 80% stake in Nalcap Holdings, a profitable Canadian iron-ore mine.Gene G. Marcial

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