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Strategies & Market Trends : Market Gems-Trading Strong Earnings Growth and Momentum -- Ignore unavailable to you. Want to Upgrade?

To: Smart_Money who wrote (1254)	1/10/2001 1:31:38 PM
From: Dave Gore	Respond to of 6445

Quick "GORE REPORT" on FDRY (compare to a stock like RBAK) Not real comprehensive and some is just my opinion, but hey, it's free! I used to do these all the time. Maybe I should start them up again....lol! Today News: Wins Award for Best Customer Service siliconinvestor.com Financials and Growth: siliconinvestor.com Positives, imo: Growth decelerating but still strong at 191% in previous quarter and down more this quarter but still realatively strong. Gross Margins: 62-64%. Relatively low PE at 15+ (ttm) Negatives, imo: Class action suits and at least a temporary slowdown, but at what point is enough enough? I don't think you can't be as negative when the stock falls as much as it has. Annual high was a ridiculous $212. Conclusion, imo: Tough call, but I am buying a little here with tight stops under $10 if it falters. Then I will reevaluate and likely buy more aggressively at $7-9, if it gets there. It would actually be better for me if I could pick it up well under $10. Intermediate term, I see $15-17 as a possible upside. My philosophy... I'll risk losing a couple hundred in the next couple days to maybe make a couple thousand in the coming weeks or months. Not a big trade today and won't be unless it tanks well below $10. Just one of many. An example of good "Reward to Risk" ratio. PS- An MIS Director buddy of mine loves their products, FWIW. DO YOU OWN DD….. and maybe compare to a stock like RBAK (currently $38). While it is in a different niche, it is a similar fast-grower, who is facing similar growth deceleration but whose earnings the last few quarters have been far worse. Another example of "Where is the sanity? siliconinvestor.com Key Recent Press Release on Pre-announcement Warning: SAN JOSE, Calif.--(BUSINESS WIRE)--Dec. 19, 2000--Foundry Networks(TM), Inc. (Nasdaq:FDRY), a leader in high-performance end-to-end IP infrastructure networking products, today provided its financial outlook for the fourth quarter ending December 31, 2000. Based on current sales information reflecting reduced capital expenditures by Internet Service Providers and E-commerce Sites, the Company anticipates fourth quarter net revenue of $100 million to $110 million. Gross margins remain strong and are expected to be in the 62-64% range. Pretax operating profits are expected to be in the $20 million to $26 million range. Earnings per share for the fourth quarter, excluding non-cash charges for amortization of deferred stock compensation, are expected to be in the range $0.11 to $0.14 per diluted share, subject to final audit. "These latest projections, modified from earlier higher projections, reflect a shift over the last few weeks in the pattern of communications infrastructure capital spending," said Bobby Johnson, Chief Executive Officer. "However, despite recent challenges in the industry, we think Foundry is very well positioned to build upon the price/performance benefits of our end-to-end IP infrastructure solutions. Foundry maintains industry-leading gross margins, which we believe will remain solid as the Company continually introduces innovative new products." The Company is completing its normal planning process for the upcoming year and intends to provide sales and income statement guidance for fiscal year 2001 when it announces its final results for the current year on or about January 16, 2001, in accordance with its normal practice. Although fiscal year 2001 guidance is expected to be slightly lower than earlier estimates, we still expect to show a strong year-over-year improvement. **** FYI- I have bought a little here with stops below $10 in case.