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Biotech / Medical : BIOTECH & TECHNOLOGY INVESTING *UNDERVALUED*{T/A F/A & V} -- Ignore unavailable to you. Want to Upgrade?

To: BRAVEHEART who wrote (274)	3/11/2000 5:29:00 PM
From: dalroi	Respond to of 423

Jeffrey, thanks for your glia comments seems i sold my covred calls on your recommendation on the right time thx any idea for entry point in GZTC PPDI BXM TGEN CGPI NEOT ? thanks Stefaan

To: BRAVEHEART who wrote (274)	3/12/2000 4:15:00 PM
From: tuck	Respond to of 423

Jeffrey, I take back doing projections for DSCM. I didn't realize their business model was so closely allied to Amazon's. So I'm probably shoveling flies to try a valuation, because the marketing expenses will be unknowable when it comes to figuring margins. It depends on when DSCM decides it has enough market share and decides to cut those M&S expenses to a point at which money can be made, to say nothing of their expansion into related lines (i.e beauty products, more content, who knows what they'll try). They have a lot of room for operational improvement, and their transition to their new distribution center is a step in the right direction. Mary Meeker expects $4+ losses for the next 3 years, and I have no reason to doubt her, so DSCM is going to have to go to the well more than once. At first, I also worried, since this is a top line story for the foreseeable future, about how they account for revenue. But they deal in hard goods with actual prices, not auctions like PCLN, where this worry is a more legitimate concern, as they're always issuing warrants to finance inventory there. So, my guess now is they're selling the Amazon "look how fast we're gaining share & growth" story. I already showed that the market growth rate is in excess of 115% per annum. DSCM's q over q revenue gains have been 5x, 3x, and .5x. beauty.com revs will be included next quarter, which will likely pump the gain back over 1x. So even comparing revenue growth with market growth is difficult (not many data points, fast changing trend, several variables), but it looks like they're well ahead of the curve in gaining share at the moment. These numbers may change as the bricks & mortar retailers get their online act together. So spending money at this time to grab share seems like a reasonable thing to do. I must say that though major acquisitions aren't mentioned, there are some interesting possibilities. Though not all such mergers work (is there clear synergy, or is this desperation?), going after the other pure play, PlanetRx would be an idea. Look at the cash per share: half the market cap is in cash. Worth a swap for that perhaps? I would have to look at the obligations (promotional commitments, etc.)-- maybe not. Further, DSCM has finessed the question of competition with traditional drug retailers by partnering with one. Because of the RAD relationship, I don't see DSCM itself as being in play. Anyhow, I can save the M&A angle for later. Bottom line. The story being sold to fund managers is that top line growth will exceed market growth. DSCM could have several billion in sales a few years down the road, I'd say as a WAG, 1/3 of that 9B in 2003, max. However, should consolidation occur at the top of the brick & mortar food --er, drug -- chain (i.e. RAD buys or gets bought), there could be some upside to that share. I could see 'em being a $300 stock then under about the most optimistic scenario. So maybe $45 for this year. I think the most we can expect in our time frame is a run back to the $30 they were originally hoping for. That's 50% over a few weeks, in line with our goals. So count me in. siliconinvestor.com You still like $20 as an entry point? I'm beginning to wonder if we'll see the teens again. Here at $21, stokes look oversold. But volume looks awfully light. If this is the bottom, I'd expect to see more blocks than we've being seeing for a while. All the big volume days have been below $20 for the past week or so, looks like retail recently. Maybe I missed the teens. OTOH, I expect some market wildness this week (triple witching again), and that DSCM will be somewhat affected. I may nibble a teeny bit above 20$, but I'm still thinking I might get one more shot at the teens this week. There's gotta be one or two big clients late to the party ;~} Cheers, Tuck

To: BRAVEHEART who wrote (274)	3/12/2000 7:05:00 PM
From: tuck	Read Replies (1) \| Respond to of 423

Evening, Jeffrey, A counterpoint from pros re DSCM. A Gruntal report with price targets has a rosier scenario. As an SI member, you can get it for free through the Multex Network. In a nutshell, they use a '00 enterprise value to revenue multiple to value the company. They find it significantly undervalued compared to its peers in the Internet Healthcare arena, when they think it should command a premium because it is an ecommerce company, which deserves a higher multiple. Their six month target is higher than mine. I don't think they are as pessimistic as I about the direction of the overall market during this time, is most of the reason. My WAG for max revs doesn't look that wild, in that it included swallowing PlanetRx; take that out and my guess is pretty close to theirs (wonder if we're using the same market data? ;~} ). They assume quickly increasing margins, partly because beauty products are higher margin, something I didn't know. So I'm willing to revise my target up to roughly halfway between mine and theirs: call it six months to $55. I don't think this changes my next few weeks forecast. multexinvestor.com I don't believe they are involved in the offering, at least, they are not mentioned. They are a market maker in the stock. Cheers, Tuck