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Technology Stocks : American Power Conversion

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To: Gil Gilbertson who wrote (1103)	3/28/1997 2:09:00 PM
From: Silc	of 2574

APCC has about 43% market share as I remember. You are right that they have the largest market share but there are other significant competitors who can keep pricing in this product from becoming exorbitant. This is not a product that is in as massive demand as a disk drives for example. I think you are right about the possibilities of expansion overseas, although we will have to see how successful they are in competing with Samsung and companies like that overseas. When you say that only 10% of computers have UPS I do not know what computers you are counting. The ones that really need it like, servers I would expect the percentage to be much higher. I do not believe that you are going to see a dramatic increase in usage of UPS for desktop computers. Most people will just purchase surge protection. The real growth engine for APCC has to be from the general growth in servers which require UPS. If APCC can maintain their market share and profit margins (both big if's), then they should be able to enjoy 20% earnings growth. By my analysis an upper end valuation for APCC at this moment in time is about $32/share.

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