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Technology Stocks : LEGATO SYSTEMS LGTO -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (802)	2/11/2000 12:45:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 1138

Joel, You should always be nervous when investing in growth stocks because the "value" is in the promise of future performance, and the future is fickle. Additionally, the tech market is very overheated. Having laid out those caveats, I still think that LGTO is dirt cheap. It has an consensus estimated 5 year growth rate of 51.2% (four times that of the S&P 500). From a very simplistic point of view, it ought to be trading at a significant premium to the S&P 500 P/E. The S&P has a PEG of 2.26, while LGTO has a PEG of only 0.88 which I interpret to mean that the implied growth of LGTO is only 5% or so given general market conditions. Given what I have discovered over the last several weeks, I can only conclude that the current price of the stock is depressed because of undo skepticism triggered by the revision of Q3 earnings and exacerbated by the failure of sell-side analysts to delve into the numbers. But this inefficiency has given us a gift IMO, so I should be thankful to the street analysts who shoot first and ask questions later. TTFN, CTC

To: Box-By-The-Riviera™ who wrote (802)	2/12/2000 5:02:00 AM
From: Edwarda	Read Replies (1) \| Respond to of 1138

Chuzz has already answered you, so I shall simply add to his posting. "Street" analysts have so many experiences like IFMX and NETA that they have good reason to feel leery of sticking their necks out too far: The ax is always out there and even if one is proven correct after one is fired, the Merrill Lynches and Lehmans of this world do not customarily go back and say, "Whoops, sorry, you were right and do come back." Being "right" is small comfort when one is pounding the pavements looking for work, so they take the safe approach. I can't blame them. We on SI cannot imagine what it would be like to be yelled at by "buy-side" clients and by the sales force for weeks on end and sweat that we might be fired before we are proven out. It can be very difficult and most of us on SI do not understand what this life is.