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Biotech / Medical : ARTERIAL VASCULAR ENGINEERING -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Gurian who wrote (298)	11/7/1997 1:34:00 AM
From: Zeus549	Read Replies (1) \| Respond to of 339

Jeff, As I see it, the technicals on AVE are actually a bit weak. I think you are right though about the possibility of a significant bounce yet from the inevitable announcement of FDA approval. My take is that we will have a drawback to the low fifties so that the MM's will have some room for a good bounce possibly into the mid 60's depending on how much has already been discounted which I happen to believe is a significant amount ( you may recall the bounce AVE got on Guidants approval--that bounce is still with us) . After that it may be a trading range since most all the long sought news will be out (at least that we know of). I think then the price will start to become more PE sensitive and I don't think a PE of 80 to 90 is realistic. I believe I've mentioned a figure of $75 for the stock at some point in the future which would be a PE of say 35 on earnings of $2/share. This seems possibly doable by the end of fiscal 99. I don't think we will find any analyst who would care to stick out their neck farther than that at this point. A year from now we should have a much clearer picture on the future in this country for AVE and then the total EPS assessment may be much different. On the market in general, yes I'm a bit bearish. As you may or may not recall, the corrections of 87 and 90 were in times of much higher interest rates. IMO those corrections were in reaction to that climate. I think this situation is different. Although on the face of it, one might think deflation would mean lower interest rates and that would be good for the market, the reality may turn out to be lower interest rates and a lower market also. In a real deflationary scenario, companies will be under a lot of pressure to lower prices which will in turn lower revenues and finally lower EPS and we all know what that means for stock prices. I think this is just part of the natural ebb and flow. The past few years have seen tremendous growth worldwide with much of the growth being leveraged pretty heaviy in Asia and Latin America. Now it's time for a breather and consolidation before the next advance. How long the conslodation period might be, I don't think we can know, but it would seem like it could last a couple of years possibly. Well, I've really gotten myself out on a limb this time. Maybe I better shut up before I start to have to eat crow. PS A real twist for AVE would be a merger and or acquisition.Now that would certainly effect the stock price one way or the other also. This isn't out of the question either. In my notes from the previous quarter's conference call, I see that Jendersee said something about possibly pursuing those avenues.