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Non-Tech : PSUN A new breakout at $30+!
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To: Adelantado who wrote (713)12/20/1998 10:52:00 AM
From: Wolf 2   of 1622
 
Hi, Joe:

I'll have to take issue with some of what you've said.

...this quarter est. is off 26% from same quarter last year. This coupled with the overbought condition last summer...

While it's true that PSUN has stumbled a bit in its efforts to achieve yet another sequential qrtly. gain, I don't think that that justifies as massive a stock price reduction as we've witnessed...to ~13 P/E on trailing earnings with the S&P at ~25. "Overbought" is, therefore, a matter of perspective IMHO.

Watching what teens wear, being there with the goods at reasonable prices without investing in too much inventory is a good way to start

From what I have learned about PSUN's modus operandi (mostly from E. Graphs and the media), they are among the very best at monitoring the current fashion wants of teens, including constant group interviews with teen customers. The fact that they 'got it wrong' on the turn in the 'wide pants look' simply underscores that nobody can get it right all the time. I believe this is merely a blip in PSUN's performance record and will be aggressively addressed. This is not unlike Compaq being caught with too much inventory in the pipeline last Spring. Discounts to clear the pipe cost it in the short run and the same will undoubtedly happen here.

It sounds as though you still like the company on balance, so would you not be a buyer at this level? I don't see any significant downside and plenty on the upside.

Regards,
Wolf
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