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Technology Stocks : AULT: The unnoticed superstar
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To: Kevin M. Reilly who wrote (310)12/17/1998 5:19:00 PM
From: Clarksterh  Read Replies (1) of 369
 
Kevin - Obviously I am somewhat disappointed as well, but my disappointment is a little different. It's not that I don't think that they will get pretty good growth from the cable modems, (after all their customers are projecting a rise from 5 or 6 thousand power supplies per week to 11 thousand in two quarters - that's 40% per quarter which is approximately in line with my expectations) its that they are a little bit further back on the curve than I thought. I was fooled partly by the hiccup last quarter and partly by the numbers from the stories about the sales of cable modems as of late July. (I still don't know what happened to the latter). I would say that Ault is a little more than 1 quarter behind where I expected it to be. C'est la vie.

BTW - My approximation of 15k units per week in the earlier post is very conservative for calendar Q4 since at the current growth rate it should be 15 thousand per week at the beginning of the quarter. And although with the conservative numbers it is only a 25% growth rate, (assuming nothing else changes) that is relatively high margin product, and I would expect that their net margins will go up substantially from their current 4% to maybe 6%. Finally, the LZR sounds like it could be an unexpected bonus (if it does indeed do $10M, is accretive, and only cost $3.xM), but I'll reserve judgement since it is often true that incorporating an acquisition is harder than first expected.

Bottom line I'm not selling, although there are still a lot of bargains in the second tier tech stocks.

Clark
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