Glenayre Technologies(GEMS)- a pure cellular PCS play? Message Board

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Technology Stocks : Glenayre Technologies(GEMS)- a pure cellular PCS play?

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To: Skeeter Bug who wrote (2264)	10/30/1997 5:19:00 PM
From: gary althoff	Read Replies (1) of 3431

Since SI did not have anything on GEMS fall today, I thought I might see what AOL had (via a friend). He mailed me the info below. Notice the decrease in earnings. There is a response to the decreased earnings from someone on GEMS MF board. All seams reasonable. Any comments? FIRST CALL EARNINGS ESTIMATES GEMS Glenayre Technologies Inc 10/28/97 Industry: Com-wo AT&T SIC: 3663 Latest Price: $13.00 1997 P/E: 14.3 Analyst Recommendation: 2.5 QTR QTR FY FY Dec 97 Mar 98 Dec 97 Dec 98 --- --- -- -- CURRENT MEAN EPS 0.21 0.20 0.91 1.02 Number of Brokers 9 3 11 11 Median 0.24 0.18 0.94 1.14 Standard Deviation 0.06 0.05 0.05 0.14 Current High 0.27 0.27 0.98 1.17 Current Low 0.13 0.16 0.81 0.83 Year Ago EPS 0.27A 0.22A 1.11A 0.91 Current vs. Year Ago Change -22% -9% -18% 12% Report Date wk/Feb 5 wk/Apr 22 wk/Feb 5 - EARNINGS ESTIMATE REVISION MOMENTUM Up Revisions last 7 days 0 0 0 0 Up Revisions last 30 days 0 0 0 0 Down Revisions last 7 days 4 1 5 4 Down Revisions last 30 days 4 1 5 4 EARNINGS ESTIMATES CONSENSUS TRENDS Current Mean 0.21 0.20 0.91 1.02 7-days ago Mean 0.24 0.27 0.94 1.13 30-days ago Mean 0.25 0.27 0.95 1.14 60-days ago Mean 0.26 0.27 0.95 1.15 90-days ago Mean 0.26 0.27 0.95 1.15 COMPARATIVE ESTIMATES AND TRENDS Industry - Com-wo AT&T 16.24 10.26 44.28 58.48 Current vs. Year Ago Change 23% 31% 26% 32% Sector - TECHNOLOGY 10.87 9.73 36.57 45.75 Current vs. Year Ago Change 15% 16% 21% 25% WSJ/DJ US Index 11.54 11.12 43.08 49.38 Current vs. Year Ago Change 12% 12% 13% 15% Ratios Relative To: Company Industry Sector WSJ/DJ P/E on 1997 Cal Yr Mean 14.3 28.24 23.82 19.39 PEG on 1997 Cal Yr Mean 0.57 1.16 1.36 1.59 RECOMMENDATION AND GROWTH RATES RECOMMENDATIONS LONG TERM GROWTH RATES Current Mean 2.5 Next 5 yrs - Median 25% Number of Brokers 10 Number of Brokers 2 Industry Recommendation: 1.9 Industry Growth Rate: 24% 7-days ago Mean 2.7 Next 5 yrs - High 25% 30-days ago Mean 2.5 Next 5 yrs - Low 25% 60-days ago Mean 2.4 Last 5 Years 92% 90-days ago Mean 2.4 Diff. from Industry -0.6 Rel. to Industry 1.0 Diff. from Sector -0.5 Rel. to Sector 1.4 Diff. from WSJ/DJ US -0.3 Rel. to WSJ/DJ US 2.0 Transmitted: 10/28/97 08:30 (E_GEMS) ----------------- From MF - GEMS board on AOL -------------------- mfrlord you have done great work on this stock and i have read your post with great interest. after reading your last post about earning estimate revisions i contacted the company and spoke to mark smalley (?) and he explained the reasons for the earnings revisions. the biggest reason for the revisions are charges associated with the aquistions. the aquistions do not become accretive to earnings to 3rd quarter of 1998. both companys have excellent new products but they will not be shipped to may of 1998. there for gems will carry these companys with little revenue in the first and second quarters of 1998. there will also be some accounting charges in those quarters. now more important in my mind was the view of wall street on the aquistions. every firm viewed the aquistions as a major positive. read merril lynch's most recent research note. "cautious optimism". i was also told that gems was very cautious in giving revenue models to analyst. wall streets revenue models see gems doing close to $600 million in revenue in 1998 up from 420 this year. that is nothing to sneeze at. internally there is considerable optimism that wall street numbers are very low. i think gems managment is setting themselves up for postive upside surprises. another point to remember is the sale of the microwave radio division. according to mr. smalley? there is alot of interest in this business. the sale could generate $100 million. when this occurs there will be alarge one time gain which will add quite a bit to earnings in the quater the sale goes through. this is not in any of the analyst models. the revisions down in earnings represent non reaccuring items and should be looked at as that, just as the gain from the sale of the radio division is non reacccuring item. this company is well postioned and represents value. the reality is that gems is a second half of 1998 story. as we approach 2nd quarter of 1998 you will see a steady move into gems shares . i own his stock myself as well as for my clients and i feel this is the time to take your postion. these shares are very cheap. on a side note check out pagemarts earnings yesterday 40% subscriber growth. i no many of you are losing patience (mfrlord) but you are all invested in a company which will do quite well in 1998. selling now would be a big mistake--now is the time to buy. build your postion over the next few months.

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