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Strategies & Market Trends : The Rational Analyst

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To: Scott H. Davis who wrote (933)	5/19/1998 9:32:00 AM
From: HeyRainier	Read Replies (2) of 1720

[ Advanced Digital Information Corp.: ADIC ] Hmmm... Scott, I found some troubling developments at the company, based on its most recent earnings statement: biz.yahoo.com (1) Company reported earnings of $0.20 per share, missing earnings estimates of $0.25 per share, despite the CEO's explicit statement that he was comfortable with prior earnings estimates. (2) Take a look at this as well: Sales growth of 13.1% Receivables grew 24%, and Inventory grew 34.5%. I just wrote about this kind of development at Sunbeam. Remember Schilit's warning about Receivables and Inventory growth outstripping Sales growth? Well, it's here all over again, and this time it's with ADIC. (3) A technical Failed Signal, as the price failed to hold up above the $19.00 level. (4) Price closed below the 21 day moving average. One troubling aspect though from a short-seller's standpoint. Quoting the company: ''ADIC expects to see substantially improved growth in revenue and earnings during the third and fourth quarters,'' van Oppen said. We'll see about that. Comments? Regards, Rainier

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