Solvent,
I think the price of ALYD already reflects the growth rates you anticipate. Conventional investment theory would say that today's closing price for ALYD is the present value of all future earnings.
It seems that with a Y2k company the problem is simplified as the time frame is finite and the earnings stream is not clouded by a lot of product issues. You can go through the present value analysis, and the result will be just as obvious - with a market cap of $284 million, and eight months to earn those dollars, it seems that ALYD is overpriced.
As with other "one trick ponies" ALYD is hanging its hat on the Y2k problem and come January 1, 2000, the employees will be looking to Mr. Gruder for direction. Mr. Gruder has made a superficial effort to look at the local (Charlotte) software companies for an acquisition, but none of them provide the earnings that would justify a market cap of $284,000,000.
$284,000,000 divided by eight quarters = $35,500,000/ quarter. What are earnings expected to be next quarter?
In September of 1996 the price of ALYD was $17.00. Today, 18 months later, it is $16.75. This doesn't sound like a buy and hold stock to me. And it could hardly be called a value play. So perhaps it is a trading vehicle? Mr. Gruder did the math and probably decided that he better take the money and run. So far Gruder and Tech are the only ones that have made money on ALYD.
DMM |
