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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Apollo who wrote (12714)	12/13/1999 6:17:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Stan, I hope others on the thread appreciate two things -- that you have no problem acknowleding that you're not a genius when it comes to the numbers game and that you are FAR from the only person in that situation. You should be the hero of the numbers-challenged among us. To all, It's okay to be new at the numbers game. Just remember one thing: if a carpetologist can learn the numbers stuff, so can YOU! Back to Stan's numbers. We'll all learn together. First, the term, "run rate." The run rate is a particular quarter's revenue multiplied by 4 to arrive at an annual rate. No, we don't assume the quarterly revenue won't change in the next three quarters. We sometimes go to the trouble of determining the run rate because it helps to look at the numbers from yet another angle; one angle is always misleading if viewed in a vacuum. Now, the term,"sequential growth." If Q2 revenue is 40% higher than Q1 revenue of the same fiscal year, the sequential growth between those two quarters is 40%. The point is that sequential growth clarifies the growth between two consecutive quarters. (Contrast that with the annual growth which clarifies the growth between the same quarters of two different years.) Great! We're movin' right along. Now back to Stan's numbers. Y2k annual revenues would = 1.4 x 1.4 x 1.4 x 1.4 x $93 million = $357 million for FY '00. Yet as I type this, I am looking at David Levy's H & Q report from 12/1/99, and he lists 2000 Est. revenues of $638 million. Using your multiplier of 1.4 and a base of $93 million, each of the quarterly revenues would be approximately $130 million, $182 million, $255 million, and $357 million. Add 'em up and ya got $924 million, more than Levy's $638 million. (In other words, you forgot to add the quarterly revenues your 1.4 multiplier gave you.) What does that imply? It implies that Levy is for the time being projecting sequential revenue increases quite a bit less than 40%, though he's certainly projecting substantial, enviable growth. Hope this helps. --Mike Buckley

To: Apollo who wrote (12714)	12/15/1999 1:14:00 AM
From: ggamer	Respond to of 54805

etrade.com Updated: 14-Dec-99 Exodus Communications (EXDS) 169 75/16 +1 3/4: Exodus n. -- a departure of a large number of people. Perhaps this web hosting and network management solutions company needs to be renamed, because it doesn't seem like anyone is wanting to depart from this stock these days. Once again, shares of EXDS are benefitting this morning from Wall Street's bullish backing. The latest firms to sing the praises of Exodus Communications are Salomon Smith Barney and Soundview Technology. The former upgraded the stock from "outperform" to "buy" and raised its price target to $215 while the latter initiated coverage with a "buy" recommendation and $197 price target. Soundview also described Exodus as the leading pure-play data center provider. Similar incantations have also been heard from other firms. Just last week, Merrill Lynch started coverage with a "buy" rating, $200 price target, and labeled the company a "category killer." One day before that pronouncement, J.P. Morgan initiated coverage with a "buy" recommendation, an 18-month $140 price target, and called the company an "industry titan." Neither these observations nor the company's growth prospects have been lost on the investment community as shares of EXDS have been on a tear since the beginning of the year. One indication of the manner in which this stock has traded is that it is scheduled to split 2-for-1 tomorrow-- its third 2-for-1 stock split this year! The company has also proven to be very adept at managing earnings expectations as it hasn't missed estimates since going public in March 1998. Following its fiscal third quarter earnings report, PaineWebber noted that Exodus Communications had reported its 12th consecutive quarter of 40% sequential internal growth. The company has a projected 5-yr growth rate of 58.3%, and although its valuations are of biblical proportions, analysts and investors continue to find reason to follow this stock into the promised land.-- PJO.