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Technology Stocks : Ascend Communications (ASND)
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To: sepku who wrote (9770)8/26/1997 4:37:00 PM
From: vegetarian   of 61433
 
I agree that if a warning of earning shortfall were to come it
will probably be late in the Q. This is necessitated because ASND
hopes to make major portion of the revenues in the last month (remember heavily backend loaded?) and it is also possible that
in the hopes of meeting the estimates until the last day, the management may not warn the shareholders and the shortfall may become evident only when the earnings are announced.
In these circumstances, an absence of warning as a boolish sign could well be an incorrect interpretation, it appears that they would warn in advance if the sales are so bad that they clearly have no hope of meeting the Q.
With the recent downgrades in estimates and subsequent comments by various analysts and low volume (lack of buying enthusiasm) the instituions are most likely estimating a shortfall.
But the low volume and the trading range also indicates that the holding institutions are not dumping yet and are expecting growth to continue in the further Qs, so long run picture is probably OK.
I think for long term buyers there willl most likely be better opportunity in future while traders have fun till then.
How much ASND could fall if there is a shortfall/warning depends on where it is at that time and how badly they are missing.
If it is 1-2 cents difference they may go no lower than 36, if the
difference is more than say 5c they could easily see 30 level.
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