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Technology Stocks : Precision Standard PCSN killer Q1
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To: Rashid Garuba who wrote (25)5/20/1998 12:09:00 AM
From: Chris  Read Replies (1) of 68
 
I am betting this was an mm who just received shares to sell and was simply thrilled to have them come in to their inventory at the right time. Surely they could have squeezed more out of the buyers today. Not all mm's are clairvoyant. PCSN seems like a company that is low or no growth (revenue) who has made great strides in lowering overhead to leverage revenue better. I don't think this will get out of hand and run up to 15, but I do think it could be fairly valued at seven or eight. I arrive at that number via two ways, one is taking a conservative approach as to which numbers in the p&l this quarter are anomolies due to the prior write off, while considering stagnant to decreasing revenue and a PE of about 14. They are not growing the top line, so they do not deserve a higher multiple. The other valuation of $8 is the old estimate of FCF using a rate of return equivalent to like securities or about 18%. Just my thoughts, but when did a realistic view have any validity the last year or two.
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