Knight/Trimark Group, Inc. Message Board

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Non-Tech : Knight/Trimark Group, Inc.

KCG 20.00

0.0%

Aug 17 5:00 PM EST

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To: Bob Kim who wrote (3525)	8/14/1999 11:12:00 AM
From: JZGalt	Read Replies (1) of 10027

Bob, I'm a Merrill client for 20 years and have used their online research since it's availability about 2 years ago. I have to say that the research is conservative. In saying that, you will be unlikely to get a "pounding the table call" on valuation as was issued by BBRS in early August. Merrill's phrasing was "Inexpensive but not riskless" in their August 3rd report. The amazing thing about that report is they talked mainly about how good or flawed the current DCF model is depending on their assumptions. Under our baseline assumptions, we see NITE valued at around $60 based on our DCF model over the next 12-18 months. However, it seems that not all the risk has been reflected at current levels, as we could see further downside risk of 20% under our stress test conditions;(35% if we were also to cut our assumed 5 year earnings forecast from 25% to 20%). Frankly, I don't follow ML for most very high growth stocks which are relatively recent IPO's because they typically don't cover them unless they were in on the offering. ML was part of the NITE IPO. In any case Kraushaar (who is the main guy in their banking area) is backup on these reports and I have confidence in his judgement from reading many of his reports. Sean Chin (who is the author of the reports) is an unknown to me.

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