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Technology Stocks : MRV Communications (MRVC) opinions?
MRVC 9.975-0.1%Aug 15 5:00 PM EST
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To: jay silberman who wrote (680)11/17/1996 10:00:00 PM
From: Dan Ross   of 42804
 
Jay

I understand your dilemna so to speak.

However, I do not like high-priced stocks for one reason. Many mutual funds cannot make a 1% stake of their funds in a company such as MRVC since the stock has few shares outstanding. If a fund has $5 billion, 1% = 50 million dollars which is a nice stake in MRVC with a market cap of ..... let's see.... 23 * 18.5 = $425,500,000. That would be approximately 1/8 or exactly 11.7% ownership. WOW!!!!!

at $1 billion = 10 million = 2%. So as you can see, many large mutual funds can't put 1% of their ownership into these gems yet. This is really when you begin to see support for a stock and less fluctuations.

Actually, the more shares outstanding, the larger the market cap so to speak. (Only good growth companies please. I don't want anyone thinking that I am talking about utilities here) Most mutual funds can purchase a position in a company once they have finally grown to a certain point. That will be when word gets out on Wall Street.

A classic example is Cisco. Look at the chart and price vs. Market cap. Once it got to a certain point, it became more stable once Wall Street was able to accumulate the stock.

Good Luck

Dan Ross
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