Parlux (PARL) Fragrances Message Board

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Non-Tech : Parlux (PARL) Fragrances

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To: Chuck Williams who wrote (401)	5/5/1997 8:13:00 PM
From: Stingray	of 527

To answer the question of why would I hold onto PARL. Because I think that the company is worth more than the stock price would indicate and I'll be able to sell at 50% higher than the current price if I just wait. It may take 6 months, a year or two years before the stock trades at book value but I don't have any problem in waiting as long as they are continuing to make money, which in turn increases book value. My average purchase price is 3 1/4 so I'm not too far underwater right now. My main concern with networking stocks is that the current price already assumes high growth and any drop off in the growth rate would cause the stocks to trade at lower multiples. I think that you can make good money from stocks in rapidly growing areas if you can sell before the growth rate drops and the products become commodities which any of a number of large companies can produce. Xerox used to trade at a very high multiple before everyone in the world figured out how to make copying machines. I'm not saying that networking stocks are a bad buy it's just that the current price already assumes substantial growth for the next five years and I see more potential for surprises on the downside than on the upside.

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