C-Cube Message Board - Msg: 1086167

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Technology Stocks : C-Cube

CUBE 36.31

-0.9%

Dec 8 3:59 PM EST

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To: Roger Mills who wrote (12253)	3/28/1997 8:08:00 PM
From: Craig Gordon	of 50808

Roger I am a crazy nut like you as I just don't understand why the stock is priced so low. My calculations show an outward price earnings per share of $12.71 in 2003. I guess we are taking the same drugs. HA! Anyway this is what I have been thinking lately. If, like Alex says DVD is 15% of sales in 1997, and if gross margins are in the mid 50%, and if total sales are 500 Million - Value line's estimate (almost) then: DVD sales = 75 Million with a profit of 37 Million. Since C-Cube's overhead expenses are now being covered by current operations this 37 Million should fall to the bottom line, less any extra spent on R&D. Cube made 17 Million in the 4th qtr. If we take the 4th qtr and multiply it by 4 - and you get 68 Million. Add that to the 37 Million and you get 105 Million. Divide it by 38 Million shares and you get earnings of $2.76 per share. I have been investing in companies for 30 years. I guess my calculator doesn't work for me like it does for those hot shots at Needham. One other thing - Look at page 22 of Cube's 10K. C-Cubes gross profit margin has increased every quarter for the last 7 quarters. Their gross profit margin for the 4th qtr of 1996 was 56%. ESST can't be hurting Cube much in VCD if half of Cube's sales come from VCD, Cubes sales are increasing, and their percentage margins are increasing. Sorry for babbling, but I don't think I am seeing a mirage. It is obvious that the market is giving no value to C-Cube for its position in the DVD market or in the DVN market (Digital Video Networking). The market will give Value in the future to Cube for these businesses. This stock is better than Amgen at $5 a share!

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