DIGL... Digital Lightwave.... Making Waves.... Message Board

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Technology Stocks : DIGL... Digital Lightwave.... Making Waves....

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To: IEarnedIt who wrote (513)	10/16/1999 6:05:00 AM
From: Crossy	Read Replies (2) of 934

thread, been into DIGL since $7,43 My target is $50-60 range. Here's why..Do your own math: first let's state that DIGL is a DWDM related play. Funnily, the economics (gross margins !) of all DWDM/fiberoptic related plays (hardware, eqipment, software, etc.)are quite comparable: Look at the GROSS MARGINS (Sales-COG Sold / Net Sales) of JDSU, ETEK, HLIT, CIEN and DIGL. All are above 50%. DIGL is even above 60%. Now look at the "leaders" in terms of Price to Sales : JDSU, ETEK are at PSR 35 or 17. Now account for the hugely rising revenue of DIGL in a way by calculating "implied PSR" -> e.g. multiplying the CURRENT revenue figure of $14 million times 4 to arrive at "implied" annual sales of $56-60 million. At today's close, this is a Price / Sales of 3-4. This means we could easily have an 5-8 bagger on current levels... best regards CROSSY

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