Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Roger A. Babb who wrote (17810)	3/19/1999 11:00:00 PM
From: Zeev Hed	Read Replies (1) of 18691

Roger, you must have had a Freudian slip by referring to ZITL, I was referring to Citrix, which unlike ZITL, are very well run, have a record od going from some $10 MM in sales to $250 MM in sales in five years or so, and doing it quite profitably ($61 MM profits on some $250 in sales ain't that shabby in my book). You see when a company has 27% return on equity and 18% return on employed assets, it makes a lot of sense for such a company to borrow at 5% to 7% (and I doubt it is that high) on which they know how to make 18%. In my book that means that they will get another $40 MM to the bottom line on this debt. Syue, they are "overvalued" at 10 to 15 times sales and 50 to 75 times earnings, but if they keep growing sales at 100% year, maybe it is not so expensive. The point I was trying to make is that Citrix is a well managed company. You could catch it in a down trend short term, but long term they will come back as long as management has that Midas touch that turns paper to gold (or I should say magnetic and optical media to gold). Zeev

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