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A reprographics company in the United States providing business-to-business document management services to the architectural, engineering and construction industry.
I think ARC's stock will outperform the market, but that's only because most people (I'm speaking about people who are not involved in the reprographics industry) have "no clue" as to the "biggest challenge" that "reprographers" are now experiencing, and will continue to experience as the future unfolds. People who don't know how the AEC reprographics industry works think that ARC's revenues will rebound in direct proportion to the rebound that the AEC industry will experience. That's always the way it was in the past, with every recession the AEC industry experienced, so, "why ain't that gonna be the same this time?" Well, there's a "digital" transition that's been going on for years, by now, and that transition has heightened during the recession. What I'm speaking about is the fact that AEC customers are not printing (per project) as much as they used to print (per project.) They (customers) are transmitting digital files to project participants. The use of electronic take-off software has already had a negative impact on the volume of printing. The growing use of "BIM" will further reduce the need to print. As to GC's, who have long been the major "print volume" customers of reprographers, they are sending out "CD's" with plans and specs (or are using FTP sites to share files with sub-contractors), rather than ordering sets of plans and specs for their subs. We used to routinely get orders for 40 or 50 sets of plans and specs for almost every project. Those types of orders are gone. Customers have found ways, and will continue to find ways, to print less. The use of tablet computers (and even the iPAD) will increase the "we don't need to print everything" mentality. But, in spite of all of this negative stuff that's going on (and which will continue to happen), ARC's stock price should perform will, but, as I said, that's simply because "most" people "think" that ARC's revenues and profits will rebound to what they once were. I don't see ARC's revenues or profits climbing back to where they used to be. Frankly, I'll be totally shocked if they do. I actually think that ARC's stock price will continue to rise and will do so until "financial investors" begin to realize that ARC's revenues and profits will not bounce back to what they used to be. But, they will not see this until the AEC industry rebounds and evidence (ARC's future financial reports) shows that ARC's revenues and profits did not rebound "proportionately." So, in conclusion, I give a thumbs up to ARC's stock price appreciation, at least for the next year. It will probably take 18-24 months before "investors" begin to see that ARC is not "bouncing back" even though the AEC industry bounced back.
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