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Non-Tech : OAKLEY- NYSE:OO

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To: DD™ who wrote (130)	1/24/1997 8:24:00 AM
From: The BayWatcher	of 1383

I had noticed OO's stock price trading upward alongside that of RAYS (Sunglass Hut) until late yesterday when news came out on RAYS. Montgomery Securities upgraded RAYS from HOLD to BUY. After the news, it seems that OO gave up some ground while RAYS held its gains at 7 13/16. This morning we found out why: CNBC reported that OO issued a warning on their upcoming earnings saying they will fall below consensus estimates. My take on this is that RAYS has been reducing their own inventories and slowed purchases from OO and B&L, thereby causing the earnings shortfall. For the next couple of months, I think RAYS will move sharply higher from its 70% plus decline to trade around 15; the latest Standard & Poors Report on RAYS states that its fair market value is over 13. After that, probably by Summer, OO's stock will rise sharply when RAYS (its largest customer) resumes ordering at normal levels. Good luck to all!

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