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Technology Stocks : Remedy Taking a hit why? -- Ignore unavailable to you. Want to Upgrade?

To: Rick Thomas who wrote (434)	1/15/1998 7:23:00 AM
From: Costa Kapantais	Respond to of 763

Heard Remedy where pulling back from ASIA (Singapore office), must have had problems in that market segment, any idea what US sales look like, most of the revenue anyway.

To: Rick Thomas who wrote (434)	1/15/1998 10:36:00 AM
From: Shege Dambanza	Respond to of 763

That wasn't a boast. It was a statement of fact, backed by evidence. Predicting EPS would be like predicting the stock price. Lots of luck, and you and I both know the EPS can be tweaked using (legal) accounting methods. The point is, Clam and I were bearish on the stock when many on this thread were blindly bullish.

To: Rick Thomas who wrote (434)	1/15/1998 3:06:00 PM
From: Clam Clam	Read Replies (3) \| Respond to of 763

Its not just about numbers. Remedy is blaming this on IBM/SWRT but that is not why the stock lost $1 billion in market cap. It is because it became apparent you can't get to be a big company by being a help-desk company. They are trying to do consolidated operations management but that does not have big revenue potential either. Add to that maxed-out margins, competition from multi-product competitors and you had the makings of a change. I didn't short it because I don't short stocks, I just try to avoid fully-valued issues and let the mo' people play the game of musical chairs. Multiples are based on perception and perception changed. I think RMDY is worth 20-25x earnings, what SWRT was taken out for. The problem is if their margins aren't sustainable, the consensus earnings estimates are too high. Estimates are right now for $1.32. Let's say the real number is $1.10-$1.20 (using lower margins and assuming revenues grow as expected - another risk). That puts takeout value in the mid-high $20's. Let's assume the probability of a takeout is 50/50 (this is a wild guess). So you have a 50% chance of appreciation to the high 20's and 50% chance of dead money. I therefore estimate an expected return of 33% from the current $17 price. How is that for a pile of crap analysis?