Help Desk Software Niche (RMDY, INFR, SWRT) Message Board

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Technology Stocks : Help Desk Software Niche (RMDY, INFR, SWRT)

VNTV 77.60

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Jan 12 4:00 PM EST

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To: Mike Buckley who wrote (72)	6/27/1997 4:41:00 PM
From: Ron Kory	of 135

You said it was a good thing that SWRT is not covered by many analysts because that makes it undiscovered. I must disagree; the fact is that SWRT has two analysts that are willing to make estimates on their earnings. I have to believe these are the two investment firms that took the company public (I am guessing that Cowen and Robbie stephens are the two). I think you have to take investment bankers with a grain of salt regarding their objectivity. Yes, SWRT is not widely followed (so far deservingly so) and if they do well they will be discovered and followed by more analysts. Yet, lack of analyst coverage is bad because the analysts hype a stock and get the institutions to buy it. Stocks need sponsorship. Of course, if you are an investor and are willing to wait that is one thing but this group has some of the wildest swings in the entire equity market and they are more for trading than investing (clearly my opinion). CLFY is a little different. There are plenty of analysts covering the stock with most in the "hold" mode at the moment because of the recent slowing in CLFY's sales. However, if something good were to happen there would be plenty of hyping from the analysts to institu- tions to buy the stock (this is just an example--not an opinion that CLFY is better than SWRT). Analysts help create the wide swings in stocks by upgrading near tops and downgrading at bottoms. The best and most recent examples are the downgrades in CSCO and COMS before they started up at the end of April. There were numerous downgrades in that period and as you probably know if you follow the group there have been numerous examples of upgrades in the last month. What changed? I like to follow stocks that have at least four to five analysts. Remember: if there are only two analysts they are more than likely the I-bankers for the company and it is hard to take them seriously. They HAVE to recommend a stock and they only downgrade it when it is too embarrasing to maintain a buy recommendation.

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