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Technology Stocks : Vari-L (VARL) -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (1103)	7/26/1999 9:27:00 AM
From: Mark Oliver	Read Replies (1) \| Respond to of 2702

Got this e-mail today. It touts investments and newsletters. I can't say it's a perfect indicator of success, but it's interesting all the same to see VARL coming up on the screen. Regards, Mark 10. Profiting from the Peace Dividend (VARL) In 1953, Vari-L (VARL) came to life as a defense contractor supplying electrical inductors to the US Navy. The firm branched into commercial electronics in 1990 and is now a maker of electronic subassemblies for wireless telephones. Stock in Vari-L rallied recently after the firm announced June quarter sales were ahead of predictions. Dow theory advisor Rich Moroney says he likes this kind of growth, particularly since Vari-L "still trades at a moderate earnings multiple and has yet to garner much institutional interest." Moroney attributes the bulk of Vari-L's recent growth to the shift from military to commercial sales of its components, particularly voltage control oscillators (VCOs). These components adjust wireless signals to a fixed frequency. Vari-L's VCOs for missile guidance and communications systems sold for $1,600 per piece while VCOs for handsets sell for about $2. But while Vari-L enjoys a short-term bulge in orders from the military (thanks to the Kosovo crisis), Moroney says the firm's future lies in the higher volume market for cell phones and pagers. Commercial sales rose from $218,000 in 1993 to $11.5 million in 1998, Vari-L owns a number of patents on its VCOs, operating margins are improving. and the firm now manufactures and markets its wares in China, "the world's largest untapped wireless market," Moroney says. Insiders own over 24% of Vari-L stock along with two million outstanding "in the money" options. "The potential earnings dilution that could result is worth watching. But dilution concerns are outweighed by growth prospects," Moroney says. Millions of wireless handsets should be sold in the near future, and each handset requires two VCOs. So Moroney is confident that Vari-L will gain enough of this business to warrant a significant boost in its stock price. He recently issued a 'buy' recommendation on the stock. For more on Rich Moroney's recommendation see "Analysts' Choice," July 19, 1999, Dow Theory Forecasts. Rich Moroney uses the time-tested Dow Theory to provide award-winning stock picks and portfolios as well as to keep investors on the right side of major market trends. Worth magazine recently lauded Dow Theory Forecasts as one of the top five investment newsletters and it was also ranked among the top three for market timing over the past 15 years by the independent Hulbert Financial Digest. For a 30-day free trial go to: member.investools.com