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Technology Stocks : C-Cube
CUBE 35.850.0%10:22 AM EST

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To: Stoctrash who wrote (847)6/11/1996 10:59:00 AM
From: dppl   of 50808
 
CUBE and technicals

A penney dropped the other day when I was looking at CUBE's chart. It reminded me of something so I went back and looked up the charts of FORE and QCOM.

If you look at QCOM, Sept to April 95-96 and FORE Dec 94 April 95 you'll see a similar descending pattern of what turned out to be consolidation and possibly a shift in ownership profile. The fundamentals of both companies are much less solid in my opinion -- and earnings are no way comparable -- to CUBE. On the other hand CUBE had a much faster rise in valuation -- it was even more a hot momentum issue than FORE and QCOM.

I find it difficult to believe CUBE can break 42. If it does then a base of 14 or 21 seems logical, unless reality intervenes and people recognize it for the steal it would be at those prices.

Personally I am long on CUBE but I have stop loss on the stock and have bought puts twice. The reason I'm long is that having read CUBE's spec papers I think they have a monopoly-like franchise in the encoding chip business, and with this enough leverage to go into other fields in a way few other companies can.

At some point, in other words, and failing disaster, CUBE will take off on big volume. It might be next month or the end of the year. Compared to some growth stocks (Iomega, USRX) I think CUBE may have more promise if you look forward 2 to 3 years.

dppl
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