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Technology Stocks : On Technology (ONTC), firewall mostly
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To: Carole who wrote (30)7/25/1998 8:35:00 AM
From: Gabriela Neri  Read Replies (1) of 79
 
Okay. We got a stock with about 12 million shares out. we have about 11.5 million in cash on the books. Almost a buck a share. NO DEBT.(Very important). We are running top line at almost 6 million per quarter with the new products. Annualized, that about 24 million in sales. So, the stock trades at 2 dollars. Take away the cash, at one dollar per share, that means that the market is valuing the business at 12 million dollars, or, one half times sales. Of course, company is not profitable. It isnt expected to be profitable because they just are ramping up the business after a corporate makeover. At one half times sales for a very decent product, this stock is a layup value oriented purchase. This is a sinch to double your money. Dont know who solld all the stock on thursday and friday. Looks like one large seller. Chances are they dont know anything that anybody else knows. In fact, it looked like a liquidation to me, a distressed seller getting out because they need cash for something urgent. If the comapny was highly leveraged it would be a different analysis. However, this comapny has no debt. No time bomb to agitate it and interfere with cash flow and timing. At one half times sales, the risk reward ratio is too compelling to pass up. This is a big time buy and with a modicum of patience(3 months) an easy 50 to 100 % gainer.
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