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Broker/Analyst Report Vertex Industries, Inc.

SECURITY TRADERS HANDBOOK

August 1996, Volume 22 Number 8
Carlin Equities Corp.
250 Park Avenue
New York, NY 10177

Sam Rebotsky, who finds big winners by buying low priced stocks when they're out of favor and undervalued (and who won our special anniversary stock-picking contest with that approach), believes that Vertex Industries (VETX, NASDAQ) could reward followers over the long-term. Vertex is a systems integration company that provides turnkey automated data collection solutions; there are three separate businesses. Two of those are measuring and weighing equipment, and bar code printers. The third, Bridgenet software, which bridges the gap between UNIX and DOS, is said to be the most exciting.

Vertex markets a range of products based on Bridgenet, which enables the direct connection of multiple vendors' hardware to a host computer. Principals of the company have known and worked together (in various ventures) for many years, and demonstrated their support for and confidence in the future of this company.

At just over $1/share, Vertex is certainly a low priced issue - but that hasn't always been the case. In fact, the stock, which got as low as $0.25, also was as high as $28 not all that long ago.

Recent sales were about $4 million, but that's set to change as a result of the planned mergers with two firms: Sombers Group and NetWeave. "The way I see it, sales will be about $9 million when the mergers are completed," says Rebotsky. And he adds that profits could rise, too.

Vertex recently reported profits and while small, that marked a clear improvement from the loss recorded the year before. There are about 5.1 million shares currently.

"It's a shot, and it's not unreasonable," notes Rebotsky. "Book value is about $0.40, the recent current ratio is very strong, they're profitable, are in a business that's sexy and merging with another company that's sexy. And profits could go higher. They're doing all the right things as far as I can see." The stock should work its way higher over time he adds.

Sam Rebotsky
Investment Executive

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