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Technology Stocks : Comverse Technology

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To: Mark Ambrose who wrote (671)	3/17/1999 10:42:00 AM
From: NotNeiderhoffer	Read Replies (4) of 1331

MA, I must admit that I have known to daytrade while rocking out to Ozzy Osbourne. I draw the line at that Marilyn Manson dude/chick though. Of course it might take a human sacrifice to get this stock higher today. Are you busy for lunch? The quarter was of course quite stellar. It is probably a blessing that they did not report a blowout. That would of taken the stock higher but that would of raised the bar to a level the company does not want. Lets face it they manage expectations very tightly. The number was three cents ahead and in line with the Semi official SI CMVT whisper number Trader Dave helped us out with. Estimates for Jan 2000 and Jan 2001 were bumped up a few pennies by most analysts who also bumped price targets which are now generally in the mid $90's to $100. Consensus EPS numbers now are around $2.80 and $3.38 respectively, and are likely a little conservative. It is tough to peg the year over year growth because last years number only had Boston in for 2 months. One sell sider is guessing that on a pro-forma basis revenue and EPS grew approximately 28% and 48% from a year ago. I would say that is pretty close. The wireless side of the business is also growing quicker than wireline but that is no surprise. They added 10 new network operators in the quarter and now have 280 worldwide. About 70% of revenue came from repeat customers and the backlog was up sequentially 6% to $164.1 million. This should provide us with good visibility for the current quarter. Earnings quality was excellent and the company generated a great deal of cash in the quarter. DSO's dropped from 98 days last quarter to 91 days and inventories came down as well. Inventory turns were up to 5.9x from 4.4x over the last 4 q's. No problems there and they are running a nice tight ship financially. Dont forget that cash is up to about $658 million which is no doubt enough to hire a good exorcist. Some of the new products are coming on strong such as the one touch call return and prepaid wireless stuff. These and other enhanced services are the key to maintaing the growth we need over the next 3-4 years. Those are pretty much the highlights although not an exhaustive list. You people don't pay me enough for that. Mucho thanks to the hardworking sell siders who perform the tough number crunching that I am too busy and lazy to do. I have to go now as the sweet sound of bagpipes are filtering up to my office. Spring is in the air. NotsureifyouhavesympathyforthedevilNeiderhoffer

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