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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: LindyBill who wrote (8888)10/26/1999 12:24:00 PM
From: Eric Jacobson  Read Replies (1) of 54805
 
I agree that Gemstar is a Gorilla. I don't know if we are in the tornado, or approaching it, however.

LindyBill raises some good points. There seems to be general agreement here that GMST is a potential gorilla and that a tornado is necessary for it to become a full-fledged gorilla. Is there a way for this group to determine whether or not the tornado has started so we can track it from quarter to quarter to determine if the tornado is in full swing? What is the metric to gauge the tornado (adoption by manufacturers, consumers, revenues)?

Until the merger is final, and we start to see some earnings increases, I just don't see any buying frenzy coming on that is going to propel this stock to 190 in the next 12 months. If a double in the next 12 months is not a strong possibility, why buy it now?

A couple of minor points here. I don't think earnings increases will be what drives a buying frenzy. They've already announced there will be tons of write-offs due to the merger and positive earnings aren't in the cards for some time. Therefore, revenue growth, gross and operating margins, and cash flow will drive the capital appreciation of the company.

Also, GMST only needs to go to $170 for a double from today's price. I bought in at $75, so it only needs to go to $150 for my double (although I'll take $190 <vbg>).
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