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Technology Stocks : International FiberCom, Inc. (NASDAQ- IFCI) -- Ignore unavailable to you. Want to Upgrade?

To: John Slampyak who wrote (2990)	9/22/1999 11:14:00 PM
From: Diamondhead	Read Replies (1) \| Respond to of 3541

The snake always comes out at buying opportunities. I have made good money buying when he is pounding the table to sell. You can to. Everyone on this board was already expecting .15. As much as IFCI seems to bumble around at times, they are still growing strong. The earnings are coming. But you do have to invest to grow for the long haul. Diamondhead

To: John Slampyak who wrote (2990)	9/22/1999 11:33:00 PM
From: david james	Read Replies (3) \| Respond to of 3541

That is an interesting commentary. IFCI is an extremely healthy company with revenues growing at near 100%/year, low debt and extremely high demand for their work. The fundamentals are excellent and the company deserves a much higher price. But the company is not being valued on this revenue growth as are many tech companies where earnings are used to fuel the revenue growth. Rather it is being valued by its earnings growth. Consider the following scenario. Suppose the company is heading towards 3rd quarter after tax earnings of $5 mill - around 17 cents. However, AT&T gives them a call and says that they have another $80 mill in contracts if they can handle it. Suppose that Kealy must decide whether to A) say no thank you - I want to show the shareholders nice profits or B) spend $3 million to train another 300 workers at $10,000/ worker - and take the big contract. What would a top-notch CEO do? Is Kealy a fool for taking the new business at the expense of the short term hit? Choosing B is better for the company and shareholders long term and A is better for the shareholders short term. The mistake that Kealy made, I believe, is in setting up high earnings expectations. With $190 mill in revenues expected this year and $300 mill next year, if this company were losing money, I suspect that the stock would be trading at about the same level - if not a lot higher. If the company were losing a few cents/share, investors would probably be basing their expectations on the revenues and the revenue growth. In this industry, the price/revenue ratio is typically around 2. That would mean a market cap of around $380 mill, or around $14/share. So to move the stock, maybe Kealy needs to announce they will be losing money the next couple quarters to fuel their revenue growth. Kealy is still saying around 50 cents (at or near), but I am dropping my expectations this quarter to 13 cents (around 18% growth over last year's 3rd quarter) based on the comments. However, it will be interesting to see what the institutions do. I am going to guess that we wander back up towards $8 as we near the next earnings announcement. David