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Technology Stocks : Adaptec (ADPT)
ADPT 14.50-0.1%Nov 12 3:59 PM EST
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To: David Nelson who wrote (1642)4/9/1998 1:17:00 PM
From: jgercke  Read Replies (1) of 5944
 
I don't know who the guest was on CNBC, but it seems to me a lot of handwringing about ADPT just feeds on itself. ADPT management didn't create the problems in Asia which are causing a lot of grief for many tech stocks; however, the management does seem to be trying to take advantage of the crisis mentality which abounds in order to position the company for future success.
The current issue of S&P Investor's Monthly lists a group of companies with 10 straight years of earnings gains, noting that the company has an historical five year growth rate of 26%, a projected five year growth rate of 21%, and is selling for a PE considerably below that(they say 10, but pick your own PE).
So I don't get it. Management is going about its business and has a great ten year record. So what if the current quarter does or doesn't meet estimates? It seems to me the current price assumes that it does. However, the real issue is the future.
Warren Buffett noted in his most recent letter to shareholders that many investors who would be NET BUYERS of securities over a several year time horizon get all nervous if stock prices decline. His point was that such a reaction was illogical. They should rejoice at the lower prices at which they can acquire shares in their target companies.
Seems to me ADPT is on sale and clearly represents opportunity. It may or may not bumble around for a while as the short termers do their thing, but who cares? That is just so much noise.
On the other hand, i might be wrong, but you can't swing at a pitch without risking something.

JG
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