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Technology Stocks : INVX Innovex Comdex Winner !!
INVX 22.05+0.2%Dec 26 9:30 AM EST
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To: Kurthend who wrote (1952)12/28/1997 9:09:00 PM
From: Douglas V. Fant  Read Replies (1) of 3029
 
Kurt, No no inside knowledge. When I invest in stocks, I look at a reasonable worst case. If we get intro a cycle ofanalysts writing down earnings, then just like analysts err on the optimistic side when estimating earnings moving forward, they also tend to "overshoot" on the downside when reducing estimates too. So I base my decision on whether to buy/not buy INVX based on this scenario.

Now look at Note #8333 under the WDC thread- it notes that while there is oversupply in hard drives due to new entrants into the market, and price per unit is thus dropping, nonetheless, demand for hard drives is strong and growing. And as the price drops per unit, the laws of supply and demand should help stimulate sales further.

Now assuming that INVX earns about $2.00/share and only grows at about 60% of the rate that it currently predicts or about 14-15% annually, then a fair price for INVX would be about $28-30/share currently.

My conservative analysis thus suggests that INVX has about a 40% upside, and assuming that the recent low of $18 7/8ths holds if there is a retest, about a 10-12% downside risk. And indeed current option premiums seem to confirm that rough ratio- about a 3.5-1 upside ratio.

So no I like INVX a lot- I just feel that we need to invest not just based upon our outlook on the market but upon what may be the likely general perceptions too....And INVX appears to pass that test too...

Sincerely,

Doug F.
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