Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 211.05

-0.7%

Dec 1 3:59 PM EST

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To: Sector Investor who wrote (20936)	11/4/1997 8:38:00 AM
From: shubh saumya	Read Replies (2) of 61433

looking at numbers clearly. the profile for ascend in silicon investor shows that the company has (in the past) grown at 15 odd percent in terms of sequential sales growth. further, its net profit margin has hovered between 15 & 20% in recent quarters. perhaps its true that the suggested price cuts apply only to a small proportion of ascend's business. even still they are likely to further reduce margins from the 15-20% range. taking sep'97 quarter revenues as base (to be very conservative) & applying 10% sequential revenue gain plus 17.5% net margin, one gets earnings per share in calender year 1998 to be $1.32. a 15% margin yields eps of 1.13. lets go with $1.2 as a fair compromise. say we get a forward pe of 17.5. then the price is $21 per share. add a few bucks for takeover possibilities & we will be reasonably priced in the low 20s. this to me appears to be what the company is telling its investors. in fact, it is confirming what market action has already proven. i hold 2000 shares of ascend & am now trying to determine if i will lose much by selling now to take tax loss, then buying back later in the year.

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