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Technology Stocks : Trimble Navigation -- Ignore unavailable to you. Want to Upgrade?

To: Rubble who wrote (1929)	12/5/1997 10:54:00 AM
From: arun gera	Respond to of 3506

Magellan Valuation Try another approach. Orbital bought Magellan for about 60 million dollars about three years ago. Assuming that they will try to get an annual return of about 8 percent on their investment, Magellan may now be valued at about $75 million. All guesses of course. Arun

To: Rubble who wrote (1929)	12/5/1997 12:15:00 PM
From: Robert A. Sutherland	Respond to of 3506

Corporate culture has a lot to do with patent filings. I worked at MicroUnity for 6yr and we generated a ton of patents, but no product. The company is now essentially defunct. Ashtech has not developed the infrastructure or corporate will to support the patent process. Trimble was staffed with HP management in it's earliest years.. fertile soil for patent generation culture to form. As I mentioned before, Trimble is Wall Street's ONLY metric on GPS companies. They have not performed "brilliantly", so the interpretation is that GPS is not a glamour industry. Consequently, all GPS startups face this opinion. Yes, given the information available it is impossible to determine the actual valuations used. Trimble ranges from 0.8-3.3, presently at 1.6, so I used 1.5 as an estimate. But even here we had to assume some sort of stability in growth(Ashtech) or contraction(Magellan) of market. We also don't know what the debt structure is like, although we know Magellan had debt and Ashtech was profitable: From orbital.com press release: " Mr. Boesenberg has headed Ashtech since 1994, during which time the company's sales have increased by 75% and it's income more than doubled." Now the next key to the perception problem on Wall Street is covered by the title of the release: "ORBITAL TO CREATE LEADING SATELLITE ACCESS PRODUCTS COMPANY.. New Company to Provide Broadest range of GPS and Satellite Communications Devices" Magellan is no longer just a GPS house, it is a "Satellite Communications" company. Trimble has been trying to enter this market as well through AMCC, INMARSAT routes. So I think the question in Wall Street's mind is not P/L as far as Astech is concerned but "growth". Trimble as a GPS company was a bad metric, but now that they are entering the broader market they have entered a "fast growth phase". I think the merged company, with the Orbital parent, is a ball-buster for Trimble. They will have to counter with something.