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Technology Stocks : ACTM $100 Million Cable Modem Contract with MOT
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To: James M. Bash who wrote (253)10/16/1997 12:38:00 PM
From: jeffbas   of 1250
 
In my opinion, it all remains to be seen. There are too many cross currents going on:

-growth style investors are probably selling, without really knowing if
future growth is a major problem, beyond this immediate period. (That type of investor probably made up most of the public ownership prior to now.)

-value style investors are certainly buying (if you take Paul as a good example), without really knowing if the value that appears to be here
will be enhanced in the future, or deteriorate.

-There is probably some forced margin selling going on and there will
likely be some tax loss related selling as well.

-There is probably some selling from people who believe that mgmt has lost its credibility. I would put the Shroder firm who recommended the stock at 33 on 9/16 in that camp.

I fall somewhere between the second and fourth categories above.

My guess is that the upside potential is much larger than the downside risk, but that we will not have a better handle on the size of each until the 10/22 conference call. I further find that it is hard to believe that in a strong industry these problems are more than temporary. (Mgmt would have to be totally incompetent which I do not think is the case.) If so, a very conservative estimate of next year's sales would be $300 million, which would give a PSR of .50 at $15-16.
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