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Technology Stocks : Safeguard Scientifics SFE
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To: Frederick Langford who wrote (2156)1/12/1999 1:54:00 PM
From: John Arnopp  Read Replies (1) of 4467
 
Except that the PE is NOT 16, but really north of 45. If you've followed this stock, you'll know that the abnormal earnings are from the TLAB buyout of CCSC, and will be reported for a few quarters, but that's it. I'll be the first to say that SFE's earnings DO NOT MATTER. But what matters are:

1) NAV - this is the basis for their value.
2) private portfolio - this is the basis for premium to NAV
3) rights offerings - this is how private portfolio value is unlocked for shareholders
4) sustained ability to issue private companies as rights and have them stay above offering price - self-explanatory.

So far, we're seeing only 1 and 2. Safeguard is trading way above where it should be, and new investors will get burnt (I believe). Just because you can have a ZAP or NM doesn't mean SFE should try to pump up price on silly Internet announcements. I want to see 3 again before getting back in, and 4 would always be nice. :-)

--John
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