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

To: Robert S. who wrote (39344)	2/16/2001 1:23:52 AM
From: tinkershaw	Read Replies (2) \| Respond to of 54805

Indeed, nice overview. Wind River has been a river of stability over the last year. Gosh darn it, I had it at $12 and then let it go at $16 or something thereto to purse Rambus and Qualcomm, et al. Hey wait a minute, I'd be no better off. Just would have taken a shorter trip;) But in regard to valuation, Wind River is deceptive. It really is cheaper than it looks. Wind stated they expect 20% operating margins within a quarter or two (if memory serves, maybe 3). Operating margins are low due to business model transition they have just completed. If you apply a 20% operating margin to their revenues and a 30% tax rate and multiply that by 4.15 to extrapolate over the full calendar year you get $.87 for the year or a current P/E of about 36. Since operating margins should be rising quickly, I expect Wind's valuation to catch up to this number in good order. Tinker Still not a tornado. But I have noticed something. The long-term earnings growth for Wind has been markedly raised since the last time I looked. It is now around 41%-50% whereas it use to be 25%-35% estimates. At least the analyst community is starting to feel a breeze pouring in.