MRV Communications (MRVC) opinions? Message Board

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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: Henry Muller who wrote (1058)	12/8/1996 5:03:00 PM
From: Dan Spillane	of 42804

My take: Intel and Al Greenspan agree in principle. You say, WHAT? Let me explain. * Al's comments seem to target the blue-chips recent moves. There has been a pronounced move in the big-cap stocks, including the likes of Intel--trading at a P/E around its average annual growth rate. On the other hand, many small- and mid- caps are trailing the large caps...trading at fractions of their growth rates. Like, for example, MRVC. P/E in the 20's, growth rate near 100 percent. * Why would Intel invest millions of dollars in MRVC as opposed to buying back the same amount of its own INTC shares? A light bulb goes on! Intel shares, at this point, are closer to being fully-valued than MRVC's, which are grossly undervalued. It seems clear why Intel made this investment right now--when MRVC shares are undervalued in comparison to INTC shares by a factor of three or so. And of course, Intel knows better than anyone else how good (or bad) MRVC's technology and accounts receivable are. After all, Intel is a significant customer. And my recollection tells me that Intel sometimes makes wise investments to augment quarterlies. In fact, looks like Intel is betting on MRVC in this case. I'm not going to argue with that. Don't you think Intel will make that little "extra push" to sell the MRVC switches this quarter? Dan Spillane CFSeattle@aol.com Chief of the Capital Fools

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