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Technology Stocks : Vantive Corporation
VNTV 77.60+2.6%Jan 12 4:00 PM EST
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To: Adam Smith who wrote (1498)1/23/1998 7:06:00 PM
From: Clam Clam  Read Replies (1) of 3033
 
Hi Adam,

Which analyst said the balance sheet didn't shape up?

Growing A/R is obviously not a positive but when it is far below 90 days and increases, it is hard to read too much into it. If it goes above 90, I would be worried but until then, it isn't enough reason to call the balance sheet a necessary precursor of a problem. Siebel had a huge A/R jump in Q3 and that didn't seem to stop them. My argument all along has been that $.80+ in 1998 is much more likely than not. Now it looks like 1999 could be $1.20+.

Re. Siebel, they have been on quite a roll. The way SEBL breezes through the numbers is quite impressive. They have some very large customers and are doing very large rollouts. But as well as Siebel has done, they still say they do 50% of their business in the last month of the quarter. SEBL has performed fundamentally and I give them a ton of credit for what they've done. SEBL also now has 1/4 the market valuation of Peoplesoft, my vote for the best company in C/S software. SEBL continues to execute nicely and SEBL's stock continues to reflect it.

VNTV gets a multiple like niche C/S software companies get. If you would have told me that VNTV would do $.19, win multiple deals over SEBL and still trade at less than 6x TRAILING revenues (about 3.7x 1998 revenues), I would not have believed it. At this point, I see very little chance VNTV stock DOESN'T appreciate at least as fast as the revenues grow (as long as they MAKE estimates). That looks to be > 60% this year so we are looking at a $42 stock a year from today. Where is our risk if they don't blow up.... low $20's at the worst. Risk/reward looks fine to me but you have to pay attention in the interim 'cause a blow up is always possible....
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