Wind River going up, up, up! Message Board

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Technology Stocks : Wind River going up, up, up!

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To: Allen Benn who wrote (1836)	8/27/1997 11:36:00 AM
From: Don Lloyd	of 10309

Allen,<<The reason WIND has been able to be cash-flow positive is that it is able to operate with net profit after taxes now approaching 18% on an annual basis. Only a few monopolies do better.>> . Although it has no effect on the validity of your post, this would seem to be an overstatement. Counter-examples would be LLTC and MXIM, with net profit margins in excess of 35% and 30% respectively, and certainly not monopolists. Sampling the net margins of a few companies seems to indicate that large, multi-division companies like HWP and MOT, for example, fall into the single digit range, while many smaller, more focused companies often exceed 20%. My uneducated guess would be that WIND should be expected to approach 25% in a few years after it starts to settle on a final scope of operations and achieves enough revenue to outweigh fixed costs. OTOH, net profit margin is just a number, and management will always have conflicting goals to choose among. Regards, Don

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