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Technology Stocks : MRV Communications (MRVC) opinions?
MRVC 9.975-0.1%Aug 15 5:00 PM EST
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To: rpsev who wrote (4004)6/25/1997 6:59:00 PM
From: STU   of 42804
 
With record sales continuing out into the future and demand for fast ethernet switches ramping up the announcement of a 2.5MM share offering by Bear Stearns seems to come at a great time.

I wonder what they plan to use the $70 odd million for. Expansion of their operations in the U.S. seems to be the most likely use. Certainly acquisitions would be made with stock and not cash.

Their growth must be expanding stronger than expected. I guess 27MM total shares outstanding and earnings expanding faster than any public Networking company, as well as the only firm to be delivering Gig Ether since Febuary, looks great in the eyes of the institutional buyers. This will give institutions a chance to buy sizable blocks through the underwriting. Since the dog and pony show will be just before 2nd quarters record earnings and sales, the underwriting will be followed by a strong earnings uplift. I think MRVC whole story will now be broadcasted to the street as not just a great networking company, but having the additional great area of optic transmission equipment. The comparison to CIENA will have to be brought out and a higher growth multiple will finally be given to MRVC by the market.

At 60X EPS of $.90 for 1997 would equal $54/share. Extend the growth against 1998 earnings of $1.45 and you figure the math.
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