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Technology Stocks : ASDV- Aspect Development-THE NEXT MSFT!
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To: Sonki who wrote (76)4/22/1997 11:58:00 AM
From: Elliot Lepler   of 414
 
Sonki,
Aspect's quarter was very strong and exceeded expectations. The company sells software that helps companies find and evaluate parts for purchase.
Early on the company has to sell customers on the idea and value of paying for their service-"missionary sales." As the software begins to become known, it's value is more easily justified. It saves very significant time and money for the purchaser.
Sales then grow exponentially. The market is estimated at over $1 billion for their products. Aspect has only 14 million shares out. As they capture the lion's share of the market, you can see why a 7 cent quarter with $8 million is sales is just the beginning.
Software carries a margin of 80% or higher. Do the math and you see that dollars per share may be expected soon.
And this quarter shows that ASDV can meet estimates and exceed them. The SAP arrangement dramatically increases their sales capacity. I believe we will see the 34 cent number for this year revised upward, perhaps to 50 cents or more. Then next year they will earn the better part of $1 per share. And so on...
If Aspect continues its growth and continues to beat the estimates, the PE of 50+ will be very well justified.
The market for techs and software in particular is very very weak now. Take advantage of prices near $20 for ASDV. People in the company believe they will see stock prices near the current MSFT levels in the next few years.
I bought around $25 and plan to hold 2-3 years for a home run.
Elliot
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