Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: LastShadow who wrote (4428)	12/22/1997 8:56:00 PM
From: LastShadow	Read Replies (1) \| Respond to of 120523

Some food for thought... I am seeing quite a few mergers, acquisitions and takeovers in the tech sector of late and thought I would add a couple more posts in that direction. It is expected, as with the maturation of the last two years tch sctor growth we xpect to see some consolidation. Companies that started out with a few products/services need to expand to stay competitive and maintain market share. The acquisitions have the added benefit of bolstering quarterly reports in an earnings-sensitive market. Th next two 'columns', if you will, put forth a simple calculation for determining a companies Break Up Value, and the general Signs of Takeover Candidates. These are worth knowing as some enormous profits and losses can be had...depending on whether you buy into the right one, or sell in time if you are holding one. This is part of scenario I am working on that says the Financial/Acuisition/Bond nvironment will change in the first quarter of 98. Basically, the funds move more money to bonds, depressing yeild, then the financials leverage this condition and fuel acquisitions, thus creating some wild price swings. This is independent of the Bull/Bear market issue, and may explain some fund and bond activity I'm noticing. At any rate, I had some time on my hands this afternoon and finally got the stuff ready to post. Its better than talking about the oil sector at any rate...(only kidding, Jenna). One last note - Jenna's and my posts on how to use news may seem polar positions, but really what they show is that there is a whole spectrum of how to use any information. What one does should fit their trading style and abilities. It should be what works for you. We both will find many of the same stocks using different methodologies, as there is no 'right way' - we play earnings differently as well, and both ways work. lastshadow

To: LastShadow who wrote (4428)	12/22/1997 8:57:00 PM
From: LastShadow	Read Replies (1) \| Respond to of 120523

The Well-Informed Trader: Signs of a Takeover Candiatate Once one determines that a stock is a candidate under the BUV criteria, there are several other inidcators worth checking out: Form 13D - This lists stock acquisition of 5% or more of a commpanies shares. Its even more telling if the individual is one of the known raiders (Pickens, Icahn, Edelman, Steinburg, Perelman, KKR, Bass family, etc.) Other signs include selling below book value Low or zero debt P/E under 10 Price less than 7 times cash flow/share Strong balance sheet, 2:1 current ratio, large cash accounts No pension fund liabilities Unhappy shareholders (lawsuits, etc) At or near 52 week low Management or Insiders own less than 5% Mutual Funds own 10% or more other takeovers in the same industry Real Estate carried on book at historical cost A good example of the last was Northrup. When a known raider started courting them, it raised some serious concern in the military (the San Diego plant produces fighter aircraft) and eventually the whole thing was stopped when the raider was told he couldn't sell off the business in pieces, but had to maintain its production readiness. One of the reasons was obvious, the company was going to be bought for about $2 billion, while it was sitting on about $6.5 billion worth of property straddling the San Diego Airport and oceanfront. lastshadow

To: LastShadow who wrote (4428)	12/22/1997 9:49:00 PM
From: John Gault	Respond to of 120523

Lastshadow, I got one for you. NTAIF - sales will be 130 million this year. average sales growth of 20% in the last five years shareholder equity is 138 million of which 90 million is cash or cash equivalent(term deposits) or 12.5$/sh. p/e 5.6. stock is trading 1.1 times book value. Company hasn't lost money, not one quarter, in the last 5 years. CEO took a 15 million dollar margin loan to buy 1 million shares in a "rights offering" with no specific need for the money other then to buy an undisclosed company and general usage.They already had tons of cash though?? Paid dividends for two years ** No long term debt cheers

To: LastShadow who wrote (4428)	12/22/1997 10:10:00 PM
From: TFF	Read Replies (1) \| Respond to of 120523

Last: Did you ever read any of B. Graham's last documented interviews in which he discounted all in-depth fundamental analysis in favour of one or two simple screens using P/E and dividend yield? I found it very interesting. He had done numerous studies which proved he could handily beat the street using this methodology in a diversified portfolio of large/midcap stocks. David Dreman(Kemper Funds/Forbes columnist) has continued this work throughout his carreer as well.