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Technology Stocks : PairGain Technologies

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To: Brad Ruffin who wrote (26592)	10/18/1998 6:14:00 PM
From: kvogel	Read Replies (2) of 36349

Brad, PAIR's decline is simply related to revenues and earnings. Although the company is making money and has great balance sheets it is currently no longer a growth company($.16 every quarter) and momentum players have left. Management has explicitly addressed this issue in the CC and has the types of products needed to become a growth company again. Also, the TELCOs have been in disarray due to M&A and fights over long distance and local markets. I believe they will wake up soon and make a bigger effort in the DSL area. PAIR products are an important part of this by bringing costs down and simplifying installation. I think PAIR will be a growth company again in '99 and this will bring back a PE directly proportional to growth rate. Hoping for 20-25% and earnings of $.75-.80 in '99. This is optimistic but new products and higher margins are in the cards IMHO. This will lead to upgrades and a return of MO players. We'll probably have to wait til early '99 to see if this develops but I am confident. Karl

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