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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Jack Zahran who wrote (5542)	11/6/1997 1:13:00 PM
From: Clayleas	Read Replies (1) \| Respond to of 31646

Jack, <TPRO is in the software industry. They cannot be limited by the size of their growing engineer ranks. Their revenue potential is now closely linked to the CD's quality, the entire size of their market place and their marketing effort. We are looking at a huge run-up> You are right about the revenue potential of the CD. But when translating that to stock price, you've got to be careful. Remember that TPRO is "in the software industry" earning the huge margins on the CD for only the next year to two years absolute max. Granted, they will get a huge quantity of cash during that time, but this is not ongoing business. For this reason, you can't use normal P/E multipliers with this income. You will notice that in Skipard's analysis posted earlier, he used a figure of only $3000 per CD rather than the likely $9000 per CD that we all expect. I suspect that he has discounted the revenue by 2/3 partly to be conservative, but also, and perhaps more importantly, to account for the above. That is my interpretation - perhaps Skip can comment further. Jim