Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: John Leach who wrote (3771)	11/5/1997 4:12:00 PM
From: Alex Engelgardt	Read Replies (2) of 120523

John, 1. OXHP - Oxford Health. It was mentioned here by Joe Copia but it went further south since the day of his post. It'll probably drift down some more but it's good for SOME sort of bounce if you factor mass psychology into the equation. (Recap: it fell 60% from $70 to $30 last week during the day the market crashed. Reason: computer system failures followed by 5 downgrades) Currently at $24 or so. Recommendation: buy in low 20s and sell at 30 or higher. 2. CYMI - Cymer. Went from $90 pre-split to high 30s. Current price: $23. Cymer makes lasers for deep UV photolithography used in semiconductor fab tools. Their competition is weak and amounts to virtually nothing. They were heavily shorted pre-split and the short float increased afterwards. The stock crash was precipitated by the company pulling out of the analysts' conference and fueled by the shorts. Emile Vidrine has posted an excellent theory about how institutional buyers manipulated the price using convertible debentures. (Note: the fall from grace happened long before the market last week). Cymer thread is one of the better threads on SI and I urge you to read it if you decide to follow the stock. Bottom line: the fundamentals are there, the products are there and the company hasn't experienced any problems with sales or payments but the stock is/was manipulated. Recommendation: buy in low 20s and hold till it breaks out. 3. RATL - Rational Software. If you know what OOP/OOA/OOD stands for, you know that Three Amigos of OOA/OOD -- Booch, Jacobson and Rumbaugh -- all work for Rational. They also happen to be the authors of UML - a current standard in modeling. The stock went down from $22 to $8-9 and has popped today. The price fall was caused by the company preannouncing bad earnings and exacerbated by the fact that the bad news were known to RATL's underwriter before the entire market found out. Foul play is hardly tolerated by analysts so they decided to strike back (ever seen Star Wars?) and downgraded the stock. (Note: bad earnings were partly due to management not being able to structure the merger with another niche leader - Pure Atria - correctly). Again, read the SI thread - all the info is there. Bottom line: this is probably the best long-term hold in this group. The breadth of their product line (besides top-notch OO stuff, there's QA products from one acquisition, version control products from another acquisition/merger, niche products -- Purify, etc. -- from a merger) is amazing and they've got the best people in the field working for them. Recommendation: buy now! It already popped today but there's plenty of room for growth. 4. BOST - Boston Chicken. They own Noah's Bagels (NASDAQ:ENBX) and operate Boston Market stores which are a current fad. FAD is also a four-letter (well, almost..) word among BOST shareholders - it stands for Franchise Area Developer and is basically the reason behind BOST's downfall from $40 to $15. The company managed to screw up the franchise financing structure and when the earnings came out a week ago, it turned out that the company missed the analysts' estimates, forget the whispers. The stock plunged to what's currently $8-9 while the company struggles to come up with a refinancing plan. Bottom line: a very good long term hold if you buy now. The price crash was partially caused by an institutional sell of 3mln shares but that just makes the stock that more attractive price-wise. Recommendation: buy now for a long-term hold. 5. VSGN - Visigenic. Bleeding edge stuff - object request broker software with CORBA written all over it. Allows one to connect legacy systems to Internet/Intranet/Extranet/whatever. This one was probably the best beaten-down stock out there but -- too late! - it popped 50% today to $6+;if you check out the chart, you'll see that it has plenty of room to grow. Compare VSGN's valuation to its older brother Irish brother Iona (IONAY) and you'll see what I mean. The price drop had no reason behind it whatsoever other than that market crash and this was one of the stocks that drifted too low. (As a note: IONAY is also a very good buy at this price) Alex.

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