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Strategies & Market Trends : Option GEMS - Hot Options in Booming Companies...

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To: Nancy who wrote (63)	7/27/1997 2:37:00 AM
From: Jenna	of 396

WIND..I've traded this stock off and on. Wind River Systems, Inc. SYMBOL: WIND EXCHANGE: NASD PRICING DATA (AS OF) 07/18/97 RATIOS & STATISTICS Price 40.25 Price/Revenue (TTM) 15.70 52 Week High 43.00 P/E (TTM) 86.56 52 Week Low 18.00 Price/Book (MRQ) 9.29 Beta 2.12 Price/Cash Flow (TTM) 69.04 Avg Daily Vol (10 Day) 0.28 Mil ROA (TTM) 11.92% Avg Daily Vol (3 Month) 0.29 Mil ROE (TTM) 14.32% Current Ratio (MRQ) 2.45 DIVIDEND INFORMATION Total Debt/Equity (MRQ) 0.00 Indicated Annual ($) 0.00 Yield 0.00% NOTE: TTM = trailing twelve months MRQ = most recent quarter SHARE RELATED INFORMATION SHORT INTEREST INFORMATION Market Cap. ($) 1,019.009 Mil Current Month 0.389 Mil Shares Out. 25.317 Mil Previous Month 0.664 Mil Float 17.200 Mil Short Interest Ratio 1.8 Day INSTITUTIONAL & INSIDER OWNERSHIP PURCHASES SALES NET PURCH %OWNED Institutions (3 Months) 8.822 Mil 3.446 Mil 5.376 Mil 72.7% Insiders (6 Months) 0.020 Mil 0.053 Mil -0.033 Mil 32.1% Couple of things I don't like here.. a) Trades at a 78% Premium PE Multiple of 64.7 X, vs. the 36.3 X average multiple at which the Software & Services SubIndustry is priced....that translates to a very high p/e of 86.. b) in the last two weeks an analyst lowered his estimates.. .and others have lowered their strong buy to buy and some to accumulate.. c) Insider selling d) Average Zacks recommendation went from 1.5 to 1.8 e) On the other hand Hambrecht & Quist rates this company a buy...So if you want to make an earnings play that could be difficult... but if you wanted to buy this as an intermediate hold, it's a great company... Nancy, it's your call.. I still like to trade this stock because it has a very nice intraday range. On the positive side: GROWTH RATES 1 YEAR 3 YEAR 5 YEAR Revenue 45.46% 32.78% 30.23% EPS 76.72% 188.92% 40.09% a)Great growth potential: b)NICE QUARTERLY EARNINGS VELOCITY - WIND Calendar Quarters THIS YEAR EPS LAST YEAR EPS % CHANGE VELOCITYx10 ------------- ------------- --------- -------- Q1 97 0.11 Q1 96 0.06 83.3 1.2 Q4 96 0.15 Q4 95 0.08 87.5 1.8 Q3 96 0.12 Q3 95 0.07 71.4 1.2 Q2 96 0.08 Q2 95 0.05 60.0 0.7 Quarter 1 96 was not as good as Q4 95 and Q1 97 was not as strong as Q4 96... I'ts basically tied for me.... Why not try a straddle... Average Quarterly Velocity x10= 1.2 Lastest Quarter Acceleration x10= -0.6 Latest Year Average Acceleration x10= 0.8 Correlation Coefficient = 0.7

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