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Bowne Is Looking Juicier

Inside Wall Street

Bowne Is Looking Juicier

Bowne (BNE), the world's largest financial printer, has a new profile: It has become a provider of software and Web-site services and is a market leader in electronic data-filing services for investment banks, mutual-fund houses, law firms, and corporations. Of late, Bowne's new businesses have caught the eye of investors. Bowne has become a "fascinating and undervalued stock," worth twice its current price of 17, says money manager David Rocker of Rocker Partners in New York.

Rocker looks at Bowne as two businesses. Printing is being valued by the market at 10 a share, or only six times the $1.65-a-share earnings from printing operations, says Rocker. To him, Bowne's printing deserves a price-earnings ratio of 15, translating into a price of 24 3/4. Bowne's new ventures represent about 40% of total assets and are being valued at just 8 per Bowne share. Rocker thinks that's vastly understating their assets. Among the company's assets is a 12.6% stake in Edgar Online, which recently filed to go public.

Bowne, Rocker says, is mulling ways to enhance shareholder value, including taking public all or part of its new businesses.

Analyst Rudolf Hokanson of CIBC Oppenheimer thinks that, while printing remains critical to Bowne's earnings and cash flow, the "development of new elements of the company is what increasingly will influence investors' valuation of the stock." A key segment for future growth, he says, is the Internet. Bowne has become an integrated Internet solutions provider, including E-commerce services.BY GENE G. MARCIALReturn to top

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