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Strategies & Market Trends : Pump's daily trading recs, emphasis on short selling -- Ignore unavailable to you. Want to Upgrade?

To: ~digs who wrote (2623)	6/21/2001 10:53:37 PM
From: Cobra	Respond to of 6873

Nice trade. This is a very unique story and a complicated one for investors and analyst to get their hands around. Without getting much into the story, the technicals or fundamentals here, you have an undervalued little EDA company in a nice secular uptrend and a really good market position (as of last months deal with "A" a 90% market share in 50% of their market) and you have them using their expertise to have started a multi-spectrum new broadband company with what may prove to be a disruptive technology along the lines of CDMA, or DWDM. That part is clearly a high risk venture but shows real potential. However this confuses the reported EPS numbers and analyst can't even agree on how to build and present EPS estimates. Add that management has proven very averse to trying to drum up PR at this stage and proven even more confused at how to do it. This, among other things (technicals included) has led to your nice $$$. As to your ?????, and this is not as a trade, but a 2 year play, ---- this stock has the potential of being a 1 to 5 billion $ company ($140mm ish now) over that time frame and beyond and their is only minor downside risk in that if they just threw away the new technology venture, the business is growing 25 to 50%, trades at forward PE of 20 (17.5 ex cash) and a little over 2 times forward sales (1.7 ex cash). Heck they could do a VC deal on the start-up venture in the coming months that puts a valuation on that venture of more than its total current market cap today. That is uncertain as they will do such a deal sometime this year, but have no need to raise cash now to do it as they can easily fund things for the next year if need be from its core business' cash flow and then add that they have $30mm cash in the bank as well.