[ASND price prediction as of mid-4/98. $65 target by mid-1/99]
Just for fun, I've outlined my ASND stock price prediction
(assuming no buyout) until mid-1/99.
Consider ASND's chart as a coiled spring based on:
1. Benefits of the 6/97 Cascade acquisition
2. "Killer switch" (GX550) earnings starting in 4/98
3. New product cycle, e.g., VoIP/TNT-II/DSL
4. 56K modem standard. 12/98 Christmas PCs w/Windows 98
5. European telecom deregulation since 1/1/98
6. Sterling customer list. No lost customers from 1997 problems
7. Asian economic recovery in 2H98. 5% back to 20%?
8. Undervaluation compared to CSCO. Growth higher than PE
9. ASND's worldwide installed base and upgrade cycle needs
10. Buyout possibility (LU, NT, ALA, INTC, IBM, ERICY, ??)
11. Data networking industry explosive growth worldwide
12. PE multiple expansion based on stable/consistent earnings
13. $500-$1000 PCs. Worldwide Internet users increases
14. Rotation into networkers from overvalued DOW/Nifty 50
15. Rotation into ASND from COMS/BAY/CS as No.2 behind CSCO
16. Momentum players return after 2-3 qtrs accelerating earnings
17. Wall St. trust in Ashby. Consistent earnings growth
None of these factors have been adequately factored into ASND's price as of mid-4/98.
4-6/98 40-45 trading range
early 7/98 Spike up to 45
mid-7/98 Q298 earnings report. CX550 revenues
7-9/98 40-45 trading range
late 9/98 45-50 trading range
(10/88 LU buyout speculation increases)
early 10/98 Spike up to 50
(continued LU buyout rumors; great compare to 10/97)
mid-10/98 Q398 earnings report
10-12/98 50-55 trading range
(buyout rumors; looking to 1999 $1.75+/sh estimates)
early 1/99 Spike up to 60 (Q4 usually strong)
mid-1/99 Q498 earnings report (FY1999 $1.75+/sh estimates)
mid-1/99 65-70 trading range
Okay, okay, use me as a contrary indicator if you like. Yeah, my sentiment is too positive, I'm too complacent, blah, blah, blah. SELL, SELL, SELL. Whatever. I've been an unrepentant bull on ASND since buying 2500 shares at $27 in Fall 1997. I'm a long-term, position player, not trader on ASND. Consider me the Joe Battapaglia of the thread.
Look, the "analysts" are still low-balling their estimates due to the Q397 .20/sh disappointment. Again, if you think this scenario is too bullish, consider that $60/sh would only get ASND back to its 52-week high and well below its $80/sh all-time high. Of course, there will be fluctuations depending on the health of the market/economy, interest rates and inflation. Bookmark this post and let's refer back to it after the ASND earnings report in mid-1/99.
P.S. If you were an investment banker advising a potential acquirer of ASND and believed the above scenario was likely, wouldn't you advise your client to buy ASND now rather than at a much higher price in 6-9 months? |
