SIGM: A stock will double its price in Six Month Message Board

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Technology Stocks : SIGM: A stock will double its price in Six Month

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To: Glenn Holbert who wrote (10)	12/24/1996 12:28:00 PM
From: Clarksterh	of 15

I called SIGM IR about their accounts recievable problem. They did not respond (it has been 2 1/2 business days). This is not a good sign. The business world is replete with examples of companies which showed a profit on paper, but which were losing cash hand over fist (due to inventory growth or accounts recievable growth, ...). They often show a large growth in stock price for a while, and then crash. The story for SIGM is that the Sales for the nine months ending 10/31/96 = 31.5M vs 10/31/95 = 19.1M (a growth of 12.4M). Approximately simultaneously the Accounts Recievable has grown from 4.8M (1/31/96) to 15.0M (10/31/96). Essentially the Accounts Recievable has grown by the exact amount of the growth in sales. They haven't actually collected any cash from their new sales of the last nine months. I am sure that there are possible explanations of this, but unless the company comes up with one, I would worry. Clark

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