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Technology Stocks : CMIC- CALIFORNIA MICROWAVE

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To: Jolly Roger who wrote (27)	1/22/1997 6:06:00 PM
From: CYC	of 67

Jolly Roger and ALL: I do not have any significant information to add except to say that I have been following the news coming out of CMIC and the trading pattern of the stock. The steadiness and the strenght of the stock recently is surprising to me but good. The latest announcement said that they would delay the Q2 number until Feb 12, that is just bprior to the filing of 10-Q. They indicated that they were going to take some charges. To my surprise, the stock held up very well after this seemingly bad news. Otto was forced to leave (I believe) after the two outside directors were elected in the last shareholder meeting. If you recall earlier news, the two outside directors were nominated by an asset manegment or investment firm, which owns 7-8% of CMIC floating shares. The board is taking steps now to enhance the values of the company. Getting back to fundamentals: 1. CMIC serves a potentailly solid growth business sector around the world. 2. Market cap/sales ratio less than 1 3. PCS is finally coming into the implementation phase 4. The board (I think) is cutting loss units (they shed a non-core division to Harris a couple months ago and apparently the process is continuing with the board and the management revieiwng all business units) 5. Percentage of business with government is declining; Companies doing business with governemnt usually get a lower price/sales ratio In my own thinking, their commercial PCS, Wireless, Satellite business alone has a potential to fetch 2-3 times of the current market value as soon as thy return to consistent earning growth for 2-3 quarters. The return of profitability will also elevate the P/E ratio. What I like most is the support this stock has in the last two months. After a brief dip, it came right back with evidence of accumulation. Eventually, the stock needs to be supported by solid earnings. Let's hope that it is just around the corner. That's all I have for my two cents. CYC

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