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Technology Stocks : ASDV- Aspect Development-THE NEXT MSFT!
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To: Ave Joe who wrote (218)1/26/1999 2:42:00 PM
From: Golfinginthesun  Read Replies (1) of 414
 
Hey Joe (I've always wanted to say that),

So far, everyone is puzzled. I have been following this stock closely since it went public and going into the new year I expected the stock to swing wildly between 37 and 48 until the earnings release with a move to 50 to 52 after earnings release at which point the stock would then show volatility around that value.

What I do see is that most of the drops have been of a low volume and the high volume looks like institutionals stocking up. This is not exactly uncommon for this stock. It is VERY volatile. Which is to be expected to a certain degree with the high multiple. The only 'problems' it has had in the past year are the following:
1) FTC review of its acquisition of Cadis (a doomed competitor) - FTC completed its review in November with no action taken
2) Foreign sales have been sluggish (just like most other companies - has not affected their growth - will be a problem if they can't address it in the next two years as they will start to reach saturation in the US at some point)
3) Last quarter they 'surprised' analyst by missing their model of subscription and maintenance revenue. They are supposed to be over 20% and they reported just under it due to difficulties getting renewals from approximately 6 or 7 customers (average deal size is pretty large for this company). Some of the problems the customers had noted was that the company wasn't refreshing the data on the VIP database plan often enough, the company has since addressed these issues and had gotten commitments or resigned at least 4 of these by late November according to the analyst).

Overall, I would say that blindsiding analyst will cost you on the promotion side. Additionally, an already wildly fluctuating stock when it was consistently hitting numbers is going to fluctuate even more once it shows ANY sign of weakness. The final thought concerns that a lot of people are beginning to think there might be another surprise this quarter. I find that hard to believe. I couldn't imagine a company blindsiding the analyst twice in a row. Their credibility would be shot. Analyst make a living being right about the future. Even though their job would suggest being impartial, they are people. From the public sources I follow they will beat earnings number. I only wish I had more cash to buy in with. I wonder how fast my banker could refinance my house....
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