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Technology Stocks : Ascend (ASND) descending?
ASND 213.290.0%Jan 2 9:30 AM EST
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To: Matthew Shapiro who wrote (155)6/18/1996 10:16:00 AM
From: Deepak R. Ghosh   of 313
 
Matthew:

Appreciate you response. I agree with you on many points. It is true
analysts cannot see more than 2 quarters ahead, and they are usually
wrong about those quarters. Nowehere has this phenomenon more
consistently true than ASND. The market for ASND's products have
grown dramatically in the past two years and analysts have been left
behind. I do not blame the analysts completely either because it is
not possible for them to predict sitting in their 50th floor office
in Manhattan. Obviously a 97 EPS estimate is based on x% EPS growth
model over the next five years which is derived from the analyst's
model of how the industry will grow.

Th reason I put out those numbers is make you say what you based your
estimate on. There is a great propensity of soothsayers in SI who
are used to throw out numbers without letting us know the basis of
those numbers. In such a situation, one either has to ignore such
things or ask questions.

Now I know your basis. You multiplied the last quarter inventory of
51 million by 4, making it $204 million. Then you put some sort
of a fudge factor to reduce it to 160-180 million to account for
higher interests, etc. Obviously you are assuming that 51 million all
parts and components to make new products. What if 20% of that $51
million is unsold finished products? Can you confirm that $51 million
is all components. If the entire inventory was components, you have
come up with a good idea. If not, some of the unsold goods have to be
resold and your 4x multiplier has to be calculated on a lower number
for "actual" inventory.

Let me know what you think. I am trying to question everything I can see
or hear. Everybody is too bullish here. They all want to make money
off ASND. I have owned ASND for a long time, so I am not selling the
stock.

Deepak Ghosh
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