The comments below are excerpted from published stock analyst reports on stocks of local interest. This information should not be used as the primary basis of investment decisions. Stock analysts and brokerage firms may own or actively trade stocks of the companies that they review and recommend. Brokerages also may participate in public stock offerings for those companies.
Analysts routinely caution that while their information is based on sources they believe to be reliable, they cannot guarantee the accuracy of their information. Nor, they say, can they promise that their recommendations will be profitable. BTG Inc. (BTGI -- $7.50; Nasdaq) "BTG Inc. provides complete system solutions for clients, including custom software development, information systems development, systems integration and commercial-off-the shelf-hardware and software.
"BTG's primary client is the federal government, which accounted for 92 percent of the company's total revenue in the first six months of fiscal 1995, ended Sept. 30. About a third of revenue is from contracts supporting the intelligence community.
"In fiscal 1994, BTG reported an 83 percent increase in sales and a 52 percent increase in earnings per share, driven by the company's VAR business. In particular, there were significant new revenues under the NATO Basic Ordering Agreement contract. For the first six months of fiscal 1995, revenue increased 58 percent.
"The federal government, like the commercial sector, has moved away from custom software and systems and more toward commercial-off-the-shelf products. Yet there still is a need to develop custom software and systems to meet special needs and tie older systems to new ones.
"BTG's growth strategy is to leverage its complementary businesses of systems and reselling, use teaming relationships, focus on customer support and make acquisitions. We believe BTG's recent win of a $195 million Systems Acquisition Support Services contract over both resellers and systems companies affirms BTG's strategy." (Jan. 18)
-- William Loomis, Ferris, Baker Watts Inc. Crestar Financial Corp. (CF -- $41.87 1/2; NYSE)
"Crestar Financial is a $14 billion holding company based in Richmond that operates three affiliate banks with 336 offices in Virginia, Maryland and and the District. Crestar has been an active in-market acquirer, closing three acquisitions in the first quarter, adding $1.5 billion in assets.
"Crestar's management has stuck to an acquisition policy that has benefited its shareholders and fueled earnings expansion from the first day of acquisition. The company has been an active acquirer at very good prices. Importantly, the company has proven itself skillful at the operational side of mergers and acquisitions. Expenses are high relative to peers, but it is hard to argue with its success in leveraging growth on the bottom line.
"Crestar reported fourth-quarter earnings per share of $1.13, compared with $1 a share a year earlier, shy of our $1.16 estimate because the company elected to sell $313 million in Treasury securities that had below-market yields.
"In our opinion, Crestar continues to perform at the head of its regional peer group. The return on average assets was 1.24 percent, and the return on average equity was 15.38 percent in 1994.
"With the acquisitions on the plate for year end, we have a high level of confidence that 1995's results will show a continuation of the earnings momentum demonstrated in 1994. However, conditions are likely to be more adverse than we had originally projected, so we are lowering our 1995 earnings per share estimate to $5.05 and initially projecting 1996 earnings at $5.65 a share.
"Crestar's acquisition strategy is clearly supported by good execution, though the overhead ratio continues to be higher than that of peer institutions. We look for efficiencies to improve as the pace of acquisitions slows." (Jan. 24)
-- Merrill H. Ross, Helen F. Woodard, Wheat First Butcher Singer WLR Foods Inc. (WLRF -- $26; Nasdaq)
"WLR Foods reported healthy 51 percent earnings per share gain for its December quarter, but we had been a little too greedy and had hoped for more. The comparisons going forward appear more difficult and we sense a bit of a shift in industry fundamentals.
"While we like the company and its strategy long term, we think the stock's near term -- six months -- progress may be muted, so we are removing WLR Foods shares from our Buy List. We are reducing our June 1995 earnings per-share estimate to $2.20 from operations, from $2.30, still representing a solid year and good value.
"Good news? Adding back legal costs from the first half, we're looking at $2.20 in earnings per share this year, which suggests up' quarters, and a modest P/E ratio of 12. Fiscal 1996 should be better, given operating improvements probable at Cuddy, debt reduction and particularly if WLR Foods can get lucky on a fast food account or two.
"Feedback remains positive, but there's nothing specific to hang our hats on. So, the downside seems as limited as upside. We're simply uninspired; we'll change from buy' to hold.' WLR Food still looks like a fine investment, this is a time horizon call and our gut says the "urgency" to buy the stock is gone. We need a catalyst to get the stock to $30, we can't see it at the moment. (Jan. 26).
-- George Shipp, Scott & Stringfellow *