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Technology Stocks : Gateway (GTW)

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To: JCS who wrote (5997)6/15/1998 10:44:00 PM
From: Wayners   of 8002
 
Ashok is making a big deal about operating margins which is net income divided by net sales. He "sees" a trend. Here are the actual operating margins by quarter. Is there a pattern of decreasing operating margins? 1998 in the first quarter was comparable to 1996. If operating margins are such a big deal, how does Ashkof explain the growth of GTW's stock price, despite the fluctuating margins? The operating margins for GTW in 1993 were 5.77% and in 1994 they were 3.55% and in 1995, they were 4.71%. So far 1998's first quarter margins were pretty darn close to 1997 and 1996 and first quarter was higher than 1994 by far. Boy, using the operating margin approach, looks to me like GTW stock should have went to zero after that paltry 3.55% in 1994 <gggg>. Looks to me like 1998 is shaping up fine. Ashkof is simply running a sham to allow his clients to pick up GTW shares for $36 to $43.50 at shareholders expense. Turn him into the SEC?

1996 1997 1998
1Q 4.42% 4.76% 4.39%
2Q 4.52% 4.06% ????
3Q 5.05% -7.11% ????
4Q 5.67% 4.7% ????
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