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Technology Stocks : CSG Systems (CSGS) Billing Support Software
CSGS 76.92-0.1%3:59 PM EST
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To: Roger L. Chuchen who wrote (96)7/28/1999 3:19:00 PM
From: double-plus-good  Read Replies (1) of 135
 
Roger,

when an outfit like the pru bear fund or a big hedge picks out a stock to short, they usually have what they consider a compelling kicker that they think will make them money. CSGS was targeted by the prudent bear fund some months ago. the short position was established and then a research report issued questioning the accounting practices of CSG. I believe the issue is one of unbilled receivables.

once the momentum starts on the downside the hedgies do what they can to keep the momentum moving. it seems likely to me that a follow-up report was issued to coincide with the earnings report. the research outfit that publishes the report is either an arm of the hedge fund or an outfit that sells its research to hedge funds. i've seen the play work before; i was in a stock that got hit around this time last year. let's face it, most investors run in terror at words like accounting irregularities.

fwiw -- i have done considerable amount of research on csg at this point and i find the issue of 8M in unbilled receivables relatively insignificant given the cash flow and the reduction in billed days outstanding. the stock appears to me to be undervalued using any number of measures save for momentum.

to compound insult to injury -- i entered a stop loss for half my csgs position and hit limit instead of stop. haven't done something like that in a long time. nevertheless i am lighter by 1/2 in csgs and not in the mood to lose my tax loss so i won't be rebuying for at least a month.

i think 23 will hold. at these prices, csgs looks ripe for an acquisition.

++good luck
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