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Technology Stocks : Avid Technology
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To: stephen silk who wrote (271)6/4/1997 2:13:00 PM
From: John Veltheer   of 777
 
Stephen and David:

The last part of the DD is what I have been saying for months but this damn stock won't die!

"WHERE TO FROM HERE?

Despite the reasonable expectation that the recent good news would move Avid shares higher, the stock price already more than discounts analyst earnings estimates. A PEG is impossible given the past year's losses. But with $0.61 per share expected for FY97 and $1.05 for FY98, Avid is now priced at 39 times this year's estimates and 23 times the numbers seven quarters out. With one analyst projecting long-term growth of just 20%, even an extremely aggressive YPEG of $21 suggests that these shares are overvalued.

A glance at the first quarter results reveals that the company derived nearly half of its net from a large increase in interest income. Also, a transition to new products for Intel-based PCs and a shift toward an increasing reliance on lower-margin, indirect sales channels will present challenges in the near term.

Avid does have a nice cash hoard and no debt. And with Intel inside, it could prove dangerous to bet against the return of this one-time highflier. Still, after the recent run, the stock may need some jazzy new special F/X before it sees another double. "

JEV, still hoping this thing will crap.

P.S. Stephen: my puts for June are at the $15 strike - you think your days are numbered???
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