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

To: Noblesse Oblige who wrote (850)	1/23/1998 9:21:00 AM
From: Brian P.	Read Replies (1) \| Respond to of 3247

The 12-month trailing PE stands at, what, 29? The projected 5-year growth rate is 30%? It is not clear to me why you all feel that TFS deserves a higher PE at THIS point in time? I suppose that you feel it deserves a PE closer to 30 vs. projected '98 earnings....? Trying to learn here.... Thank you.

To: Noblesse Oblige who wrote (850)	1/23/1998 10:43:00 PM
From: N. Saliba	Read Replies (1) \| Respond to of 3247

Hi N.O., I am afraid I have to disagree with your earning forcast which I think it is by far too conservative. We have two variables to compute the first quarter and 98 earnings: 1-1st qtr will be less than 19% of total 98 revenue ( for the sake of simplifying the matter I am choosing 18% as a number to work with). 2-MIN of 30% annual growth. There are 2 ways to compute 1st qtr and 98 revenue: 1-to derive the 18% from the 30%. 80 mill(97 revenue) X 1.3 =104 mill .18 X 104 =18.7 mill 2-to assume the annual growth more than 30% (30% is only min) and to derive 98 revenue from 18% of Q1. Last conference call Mr B said they are able to sustain Q3 revenue for the next 2 qtrs. Assume Q1 equals to 25 mill (sustained revenue) than 25 mill becomes 18% of total 98 revenue. 98 revenue will be 25/.18=138.9 mill It comes down to what is a fixed variable: 1-sustained qtr to qtr. 2-30% annual growth. I might say something in between or more like sustained qtr to qtr revenue. Have a good weekend N.S.