Safeguard Scientifics SFE Message Board

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Technology Stocks : Safeguard Scientifics SFE

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To: wellab1 who wrote (2499)	4/7/1999 2:58:00 PM
From: wellab1	Read Replies (1) of 4467

Apr.21 conference call possible outcome on price (A) EARNINGS WILL BE GOOD (1) Single punch- they will talk just last quarter earnings - moderately will influence the stock price to the upside (2) Double punch- they will additionally announce those expected,big news about their new plans ,ICG especially--dramatic upside (3)Triple punch--good past earnings +good future earnings guidance + great news = very dramatic upside.This would be the best prescription for doubling in price (B) EARNINGS WON"T BE GOOD (1)Single hit- they will talk just earnings without sweetening them with good plans and good future guidance= moderate downside (2)Double hit - bad earnings +Bad future Guidance (3) tripple hit -= (2) + bad news (like cancelling their Internet plans) Above pts 1-3 are of course higly unlikely.No one is suicidal.They will not add bad news to bad earnings. The only unknown are earnings.One can assume with high degree of probability they will use the opportunity of conference call to announce great moves and good earnings guidance.So,the most possible outcome is: (A) Good past earnings = point (3) (B)Bad earnings (4)sweetened with good guidance,justified with one time charges and investments for the future plus great news announcements Big loses will not be outweighted by point (4),moderate loses -can. Of course reaction of investors will depend upon their focus.And the focus is just in the process of shifting from strict fundamentals characteristic for the "old economy "companies to more Internet -like approach.As Michael P noticed those who can not stand the rise in P/E from 19 to 25 are taking the nice profits and those who are willing to trade P/E of 30-40 in exchange for big growth potential are moving in ,treating SFE as a cheap opportunity. Possible stock behavior in next 3 weeks: (1) Earnings run -if analysis ,guesses, preannouncements and rumors will point to good earnings (we can use more enlightment in this area) the earnings runs usually start 3-1 week before and may add 10-20% to the price.Usually the day of announcement is a downturn (buying on rumors selling on news) and if announcement is positive stock is coming back on its course within a week or two. (2)Pre-earnings downturn .Those who don't want to take chances and who are thinking great announcements will not outweight assumed by them bad earnings are taking money out of the table with eventual intention of getting back later (3Wait and see- probably the most common approach. All this can result in some seasawing Go figure Wellab

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