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Technology Stocks : ACTM $100 Million Cable Modem Contract with MOT
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To: Robert Bond who wrote (169)9/6/1997 2:31:00 PM
From: jeffbas   of 1250
 
It depends on your point of view.

As of last week's close, of the 3 industry leaders, JBIL has a trailing P/E of 56, SCI of 24, SLR of 36 (and ACTM of 25). I do not recall that any have extraordinary items of consequence in the trailing earnings. ACTM has said many times that they expect to grow faster than the industry.

You can argue about the P/E's the industry has in general, but if ACT's statement is still true and there has been no change in
fundamentals, ACT should be in the middle of the range not at the bottom. 35 times trailing earnings of $1.44 would be $50.

Over on Motley Fool I pointed to a parallel trading pattern recently to
that of last November to February, which eventually resulted in a
temporary 15% break below the base - and advised against buying here.

I am less sure today than I was yesterday. It may be that just as the close above 47 a few weeks ago was a fakeout with respect to
new highs, Friday's close may be the same at the other end of the trading range. It really depends on whether the recent decline is
based on fundamental changes affecting the company or valuation and technical issues, and publicized Wall Street comment.

(Note that their largest customer, BAY, continues to exhibit very strong price action.)
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