LEGATO SYSTEMS LGTO Message Board

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Technology Stocks : LEGATO SYSTEMS LGTO

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To: Box-By-The-Riviera™ who wrote (802)	2/11/2000 12:45:00 PM
From: Chuzzlewit	Read Replies (1) of 1138

Joel, You should always be nervous when investing in growth stocks because the "value" is in the promise of future performance, and the future is fickle. Additionally, the tech market is very overheated. Having laid out those caveats, I still think that LGTO is dirt cheap. It has an consensus estimated 5 year growth rate of 51.2% (four times that of the S&P 500). From a very simplistic point of view, it ought to be trading at a significant premium to the S&P 500 P/E. The S&P has a PEG of 2.26, while LGTO has a PEG of only 0.88 which I interpret to mean that the implied growth of LGTO is only 5% or so given general market conditions. Given what I have discovered over the last several weeks, I can only conclude that the current price of the stock is depressed because of undo skepticism triggered by the revision of Q3 earnings and exacerbated by the failure of sell-side analysts to delve into the numbers. But this inefficiency has given us a gift IMO, so I should be thankful to the street analysts who shoot first and ask questions later. TTFN, CTC

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