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Technology Stocks : Stanford Communications

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To: Cynic 2005 who wrote (33)	10/25/1996 7:09:00 PM
From: Les Shroyer	of 62

Mohan, I agree that some of the momentum funds may be lightening up. I am long a small position (1500 shares) that I bought at 42. I took the position because I liked the rich mix of communications technology development (cable modems, broadband wireless, CDMA, etc.) within a company that had a profitable base business. However, the P/E ratio at around 40 had gotten a little ahead of the actual growth rate of the company. Although the last quarter's growth over prior year was respectable, the sequential quarter over quarter growth rate was low. I do not expect any quick upside from this stock. My outlook is that over the next 24 month period there is an 80% probability that there will be modest price appreciation as the revenue growth catches up with the P/E ratio. Within this timeframe I place about a 20% probability on a breakthrough in one of their technology investments that would drive the share price to new levels. And, I do not see much downside risk below $30 unless the entire market craters and that would be a buying opportunity once the damage is done. This company is in all the right markets for the next couple of decades. IMHO Les S.

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