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Technology Stocks : Comverse Technology

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To: Beltropolis Boy who wrote (708)	5/26/1999 3:03:00 PM
From: NotNeiderhoffer	Read Replies (1) of 1331

CM, Those arrogant a$$es at Goldman (no beef but a lot of cheese) went out this morning and told everyone what we already knew. They reiterated that the April quarter (to be reported on June 1st) is in the bag and visibility on future numbers is as good as it ever has been. Apparently CMVT closed out the quarter some time ago and have been pushing deliveries into the July quarter. I would like to see them blow out the number but officially Goldman is in print at $197.5 million in revenue and EPS of 45 cents. Also look for the backlog to increase from last quarters $164 million level. They said great things about wireless handset growth but also threw in a nugget about wireline residential messaging showing strength as well as maybe the RBOC's are finally marketing the product effectively. Japan is strong and the rest of Asia should show sequential improvement and if you need a cherry on top of everything they added 10 new customers in the quarter with about 300 served at this time. Oh yeah, gross margins are likely to improve as repeat orders gain strength and the mix moves to higher margin software biz. Any major concerns should probably focus on valuation. Next years $2.25 EPS numbers are probably low; I will use $1.98 for Jan '00 and $2.40 for next FY and try to decide what this stock is worth. Since we are practically part of the Janus 20 at this point (is that good now?) I suppose a premium to the growth rate is warranted. We have also won the gorilla game. So is 35x this years number and 29x my $2.40 too much??? I doubt it as the trend seems to be my friend. My question for you is WHAT CAN GO WRONG?????????????Will we take out the 52 week high after earnings are released? Lets not get too complacent just because we kick Lucent's ass in this space each and every day. Glenayre is in the $3's as well. Not that either of these guys are direct comps but it is nearly summer and we should probably kick a little beach sand on those wimps. NotgoingtosaywearetheCharlesAtlasofTelecomNeiderhoffer

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