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Technology Stocks : Adaptec (ADPT)
ADPT 16.42-1.4%Dec 30 3:59 PM EST
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To: Starowl who wrote (3119)7/24/1998 4:55:00 PM
From: Gary Burton  Read Replies (4) of 5944
 
I bought in for the first time today after listening to the CC last night and reading between the lines . My main reasons are 2 fold----1) 78% down in less than a year is way overdone for a still cash healthy co. notwithstanding all the negatives and the collapse in eps. Now, we can ignore earnings levels near term and concentrate on whether or not the Sept qtr is the low in operations. I suspect it is.-----2) Saviers said they expect to reach ' at least ' 65% gross mgn by mar99 qtr and on higher sales. That would be a MAJOR move given that the margin in the Mar97 qtr, when things were good was only 58%. In my view, Saviers would not have mentioned this if he didn't have a plan in mind (notwithstanding his rep among shareholders at the moment). I am anticipating big changes in the wind which the momentum sellers are ignoring at the moment since ADPT is now a 'show me' stock. so, the way I look at things, 90% of all the blood is likely now on the table and we can anticipate several good news items in the near future-----cost savings details, new product announcemts etc . Just think of what a sea change in sentiment would occur once the curremt extreme pessimistic sentiment starts to shift. Even if ultimately it goes to zero, we will first have a monster B wave rally retracing 30-50% of the decline to date. that would imply at least a double even if the ultimate target is nil. Stocks like this simply don't go straight down . They rally first and last night Saviers telegraphed what is likely to come and therefore the catalyst for the rally.
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