Advanced Fibre (AFCI) ** IPO Message Board

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Technology Stocks : Advanced Fibre (AFCI) ** IPO

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To: lml who wrote (2968)	4/17/2000 8:09:00 PM
From: E_K_S	Read Replies (3) of 3299

Hi 1M1 - I was anxious to hear feedback from Mr. Ematador as perhaps I may have missed something. I am a little concerned that AFCI has such a high PE looking forward. I expect growth to be good over the next two years (especially with these multi-year contracts) but it is still very high. Even if you back out the cash in the bank from the Cerent sale, AFCI needs to grow at more than 40% per year for 36 months (3 years!) to obtain a PEG ratio of 1.0. At the current price, you pay a very high premium for this growth. I think they can do it for 24 months, but your investment (at the current price) really does not show a PE of 40 or less until 2002. They better have excellent new technology to deploy by 2002 because Mr. Market wants these high tech companies to not only show excellent on going growth but real bottom line earnings too. My initial position at $8.00/share is looking quite good, but for this company to become a "value" play, they have to execute perfectly. I really like what I see with management, especially their new acquisition of GVN. What's your take on the valuation side? Everything else looks excellent to me. EKS

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