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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (7318)	8/19/1999 9:24:00 PM
From: Bill F.	Read Replies (2) \| Respond to of 8002

d swiss-me too. also please enlighten us as to how the last qtr balance sheet manuevers jibes with the business channels they are pursuing. thank you.

To: Ilaine who wrote (7318)	8/19/1999 10:10:00 PM
From: D. Swiss	Respond to of 8002

CB, here is my take on GTW. They had a stellar report with EPS growth of 47%, reduced their inventory further to 7 days allowing them to turn on a dime with new product intros or component price reductions, improved their cash conversion cycle to negative 7 days (a four day improvement from the previous Q), doubled its ISP subscribers from 200k to 400k (and anticipates doubling that again by year end) and had non-PC revenue of > 10% of the total revenue (creating a more diverse revenue stream). They also gave a very positive forward looking statement, claiming that they have never had a bigger backlog going into their strongest season. Ted old boy even went so far as to say that June felt like December their seasonally strongest month. I think this report will be viewed as positive The only negative that I see in the report is the European results. IMHO, the recent action in the stock is a combination of a short squeeze (about 10 million shares short before GTW reported its earnings) and several big players realizing that GTW is significantly undervalued in relation to the industry and future earnings. Before taking into consideration the fact that several anal-ysts have upgraded GTW and raised their estimates (http://www.nordby.com/quote.asp?Whattoget=reports&Symbol=gtw&Go.x=22&Go.y=9), I figure GTW is worth $100 easy adjusting for industry disparities. If you consider the increased estimates, maybe $110-$120. The stock is only trading at 30x '99 EPS. I hope this was helpful, best of luck to you. :o) Drew