Centennial Technologies (CTN) Message Board

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Technology Stocks : Centennial Technologies (CTN)

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To: Maria Perez who wrote (361)	2/10/1997 11:25:00 AM
From: kolo55	of 1959

Looks like inventory writedown coming Did you read this post? techstocks.com I interpret the fact that the big boys are meeting with the company, means that the concerns raised in the Financial World article are going to be addressed. One of the most damaging at this point, is that CTN is hiding millions of inventory losses in their balance sheet. They sell a lot of PC cards, primarily for increasing memory storage. That means that they probably are stocking millions in DRAMs in their inventory, and we know DRAM pricing is down 80-90% over the last year. The company is almost certainly carrying the inventory at purchase cost, not replacement (current) cost. Earlier on this thread, I estimated that a 20% writedown in inventory will wipe out an entire quarter's worth of earnings, a 40% will wipe out two quarters. I expect we will see a writedown of 20-40% of inventory value. We will almost certainly see this company report a loss this quarter if they take an inventory writedown. For more on the problems with CTN financials, read these posts at least. (All CTN investors really should read this entire thread, and this time pay attention to the analysis in the bearish posts.) techstocks.com techstocks.com This next post talks about inventory write down possibility: techstocks.com More on stock valuation: techstocks.com techstocks.com techstocks.com The good news is: when they announce the writedown, the stock will probably drop to the 14 range, at which point this company begins to look fairly valued compared to other stocks in this sector. Only another 20-25% to go the downside! Paul

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