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Technology Stocks : THREE FIVE SYSTEM (TFS) - up from here? -- Ignore unavailable to you. Want to Upgrade?

To: voyager.ed who wrote (843)	1/22/1998 11:28:00 PM
From: Noblesse Oblige	Read Replies (2) \| Respond to of 3247

Hi Voyager, Its a pleasure to "meet" you. As far as your thoughts are concerned, I can take no issue with your reasoning. Even after spending some time "wrapping up" the day and speaking to a few of the other large holders, I am surprised at the action in the stock. The slight "shortfall" in revenues for quarter one that apparently disappointed the "Street" will be made up in quarter two as the company begins shipping. These aren't "lost" sales, merely delayed a quarter. I am perplexed as to how participants could have reacted negatively to the call. In retrospect, the most important feature of the call (aside from the very good earnings that were reported) was the indication that capital expenditures will be at the $ 14 million level this year, with $ 6 million allocated to China, $ 3 million to Phoenix, and another $ 5 million destined for the Philippines. It should be noted that this is a significant increase, as current balance sheet information indicates that the "net" investment TFS currently has in property, plant, and equipment is slightly less than $ 30 million. Yep...less than $ 30 million. Just let that sink in for a moment. Moreover, it was a significant surprise to me that the company would be spending additional funds in Manila despite the fact that it will be opening a new facility in China by the third quarter. That is another thing to ruminate on: Management is planning ahead by adding to every facility it has. I ask you plaintively....does that mean it is planning for a downtick in business? I know that Mr. Raefon (who is a fellow professional with whom I occasionally have agreement <G>) will be perturbed with me, but I am willing to make a price prediction: Assuming long term interest rates continue to be below 7%, some time within the next 12-15 months TFS common will be trading at prices two to three times the current market. Remember, Ed, you heard it here first. <G> Have a most pleasant evening...despite the TFS specialist.