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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: JOHN IACOVACCI who wrote (20820)7/20/1998 12:49:00 AM
From: CalculatedRisk  Read Replies (2) of 31646
 
John, IMO you should be concerned about earnings, or really FCF (Free Cash Flow) "flowing" into TAVA. Then you should compare this FCF potential with TAVA's market capitalization. A simple two-step process that shows TAVA's stock price is too high.

TAVA has approximately 25 million shares outstanding (fully diluted). With a price over $9 per share, this gives a valuation of over $225 million ... for a consulting company with a limited time frame and no special technology. Yes, their business will grow over the next few quarters ... and yes, that is priced into the stock at less than $3 per share!

BTW, I am qualified to judge their "technology". It is nothing special.
Regards, Bill
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