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Technology Stocks : CPCI - great earning , BARRON's suggest

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To: Kiriakos Georgiou who wrote (554)7/1/1998 3:57:00 PM
From: PaperChase  Read Replies (1) of 586
 
May I ask why you are doubling your exposure to a company with declining fundamentals? The company is dealing with an overall decline in demand possibly due to saturation in the market. The company can reorganize and restructure its operations all day long to control costs but essentially demand for their products has stagnated.

I know that CPCI's cash per share is excellent but I have learned (the hard way) not to trade stocks based on this fundamental. I once bought a stock that had $58 million ($5.75/share) against a $6.25 share price and near break-even operations. That company managed to frivilously burn $30 million in cash over the next year. So the lesson I learned, is to only look at cash levels to judge if it'll help them get through the storm.

Hope this helps.
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