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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: James Rembar who wrote (12039)3/1/1998 12:55:00 PM
From: Dr. J  Read Replies (1) of 31646
 
Your numbers are very reasonable. However, if TAVA is just a consulting company then it won't get a great multiple. I followed TCSI for a while; as a consulting company they had great numbers, but consistently got a multiple of 12-15 because of basic rule of consulting: the only way to grow the business is add more warm bodies. It was only when they started pushing a piece of s/w that PE went thru the roof.

The CD and associated services could do a similar thing for TAVA - provide leverage. But the looming 2000 deadline definitely makes me assign a lower multiple because of the added risk (that post-2000 business won't materialize).
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