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Technology Stocks : The New QLogic (ANCR)

QLGC 16.07

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Aug 24 5:00 PM EST

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To: Greg Hull who wrote (12366)	11/8/1997 11:15:00 AM
From: nic	Read Replies (3) of 29386

I think nic is suggesting that the ramp-up in revenue would be very steep, but the ramp-up in SG&A would be even greater. Thus the eps we seek would still elude us. Well, yes - I actually think Herb understood this as well. I understood his point to be that such an expectation would certainly warrant a "strong buy", never mind next year's eps - and I agree: something does not add up in the Kinnard analysis - given their projected numbers, you either have to be a believer (maintain a "strong buy" at these firesale prices) or move on to greener pastures (downgrade to "hold", if not worse). Any way I look at it, the Kinnard "buy" does not make sense to me. My theory is that they have no clue, but don't want to err too far on either side - so if their bad numbers turn out right, they can say "told you so" (never mind the "buy"), if Ancor's numbers are much better, they can say "we saw this company had the potential to beat the negative expectations, so we gave it a buy nonetheless". Anybody have a better theory? Does anybody think Kinnard knows something we don't? - nic

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