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Technology Stocks : Avid Technology
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To: David Kuspa who wrote (95)3/4/1997 12:19:00 PM
From: Justa Werkenstiff   of 777
 
While I do not see myself as an Avid promoter and while Avid's problems are well documented, I have to disagree with David that Avid is a "high risk investment" at this price. I see this stock as an above average risk investment. It is selling at about .75 cents above book value and at about a price/sales ratio of .60. (An Israeli company invloved in this same sector was acquired recently for 1 times sales). It has strong name brand recognition in the industry. It is involved in a market that is estimated to grow by 30% per year. It has little to no debt. New management has done a good job so far in strenthening the balance sheet. Management's plan is to grow revenues 10-20% and bring the bulk to the bottom line without increasing expenses. All analysts covering the stock rate the it as a "hold." I have seen, however, a slight uptick in projected earnings for the company this year to .30 per share. Yet the deviation in their projections shows there is uncertainty among them. Given Avid's stability in the current rocky market environment, I see the big risk to Avid is to be dead money. In summary, I think to buy Avid is to place a vote with management. While I have a small position in the company, I do not expect it to become a hot stock. I see value in the company and growth at the right price. But I would ask your broker to provide you with an analyst's report before you buy.

Then I would ask you to share that information with us.

Good luck.
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