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Technology Stocks : PairGain Technologies
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To: Clam Clam who wrote (5233)6/25/1997 1:30:00 PM
From: Czechsinthemail   of 36349
 
Clam,

What's a nice guy like you doing in a place like this? Nice to have you in the discussion if you can wade through all the posts.

In response to your concerns about DSO's, PAIR's management indicated the DSO change was simply due to strong orders coming in at the end of the quarter--a lumpiness factor. They ship almost as soon as they get an order, and as Paul suggested there isn't a lot of control around fitting their sales.

Also, what you say about the cumulative effect of earnings estimates is true. But PAIR has consistently been underestimated and outperformed. Long term, it is not the estimates that matter but the actual earnings performance. Granted in the short term lowered estimates can dampen the enthusiasm for the stock and drop its price, when the actual earnings come in strong, the stock gets revalued upward. In PAIR's case, the downward revisions are lowering the crossbar the company has to get over. The uncertainties floating around have discounted the price to under 30X trailing earnings, which IMO is ridiculously low for both their history and prospects for future growth. Whether the quarterly earnings come in a penny high or a penny shy, the focus will shift to the future, which looks strong.

Baird
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