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Technology Stocks : DIGL... Digital Lightwave.... Making Waves.... -- Ignore unavailable to you. Want to Upgrade?

To: squirrel who wrote (257)	1/17/1998 12:06:00 AM
From: Mahesh	Respond to of 934

Squirrel, 90 day payment terms are not unusual, and a new company hungry for sales has little leverage but to give in to 90 day payment terms. In some cases these 90 days get easily violated without even asking for extension. A small company would not impose any penalties on large service providers and other large customers in such cases. Risk of default in such instances is very low in case of a hardware product and especially state of the art product like DIGL's. On the other hand if a software company has DSOs (Days Sales outstanding increasing), the risk of default is much greater. Mahesh

To: squirrel who wrote (257)	1/17/1998 3:07:00 AM
From: ahhaha	Read Replies (2) \| Respond to of 934

Balance and income statements reflect yesterday's results. In a company like DIGL these documents are not important. Sales potential, sales strategy, management ability and initiatives,new markets, product quality,product flexibility, new product development are the things to evaluate. You can't do this kind of evaluation meanningfully with numbers. For example, all you can say is that if the market doubles DIGL sales should at least double, but it isn't meaningful to say if the market grow 28.9% then DIGL sales should grow 37.3%. The variability in rational expectations exceeds 100%, so fine tuning calculation is delusional. R&D as % of sales is more important than margins now. Margins reflect efficiency once you've reached critical mass. Critical mass isn't reached when the market is growing wildly. The ASA 312 is the premier product available. It's a nice little test box. You'd want to buy it even if you didn't know what it does because it's cute. If you believe that ATM and SONET are going to be big in the future as I do, then this is going to be a hot company. You just have to buy, hold and be patient. The stock may be double-bottoming here, but I'm not sanguine about stocks for the next several months in general. Earnings will probably be in line with expectations, so all-in-all even if it makes some upside headway, it won't run away.