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

To: Luce Wildebeest who wrote (5954)	3/7/2001 10:35:48 AM
From: Lane Hall-Witt	Read Replies (2) \| Respond to of 6445

Cal -- FFIV: Personally, I'd be cautious on FFIV. I think management is sound: it moved very quickly to contain costs, as soon as it saw the demand slowdown, which is a sign that the company is on top of its business environment. But the company faces a number of challenges. 4Q2000 product sales were up only 9 percent, year over year, which is quite low for such a high-growth industry, even with the slowdown. I don't like the balance sheet: cash levels are dwindling rapidly, now down to $36 million; A/R allowances are up considerably, despite the fact that overall A/R declined about 25 percent sequentially; shareholder equity dropped nearly 10 percent sequentially; inventories skyrocketed. The biggest problem is that its software-based appliances are seen as backward-looking technology, compared to the hardware-based solutions of many of its competitors. In this network-management space, I'd prefer FDRY over FFIV, mostly because its technology is seen as more forward-looking than FFIV's. But it's a pretty tough market for both these companies right now. I don't have a position in either. This is all just my opinion, of course.