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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: CHIP HUNTER who wrote (8822)	1/24/1998 12:03:00 AM
From: Fred Fahmy	Respond to of 13925

Poor comparison. If CREAF had IOM's foward looking P/E even based on the current 8 price, CREAF would currently be trading in the mid 30's. When IOM was trading at 13 a few days ago, this was equivalent (based on future P/E's) of CREAF in the mid 50's. <FF the earnings being revised up or beaten is this a guarantee > No just a very well educated guess <GGG>. BTW, how come chip you studder chip so much chip when you type..chip FF

To: CHIP HUNTER who wrote (8822)	1/24/1998 2:35:00 AM
From: Doug Fowler	Read Replies (1) \| Respond to of 13925

Chip: Iomega traded at 55 in May of 1996, but there has been a 2 for 1 split since then (in December 1997). The split-adjusted high for IOMEGA is 27 9/16. By the way, I have no problem with opposing views. But, for me to give value to opposing views, they must be backed up with logic, and I fail to see that you have provided anything in the way of logic to back up your predictions. How you can expect Creative to trade anywhere near $8 in the short-term, based on their very good earnings report? The reason Creative fell from its high of $29 was because of fear that the company would be extremely negatively affected by the Asian crisis. The company has shown that it is dealing with that crisis very well. While it will negatively impact earnings in the future, there are so many other positives going for the company that will compensate for that. While their inventories are considerably higher than a year ago, they still account for only about a 5 week supply (and I expect a week or two of that to be orders they decided not to ship into Asia). Accounts receivable are up about 16 percent from a year ago and also represent about 5 weeks worth of sales - I don't think that is a bad number at all. When you consider that the company has about $4 per share in cash (after substantial acquisitions), what the company has earned in the past year, and even the most conservative of forecasts for the next year, a price of $8 to $10 a share is insane, and in my opinion, a short at current levels is extremely risky. The stock could easily go to $30 in the next few weeks, but it may wait until after next quarter's report to see how much of a problem Asia is. Also, I think you should consider that if Creative was able to do so well this quarter even with Asia, imagine what will happen when Asia starts to turn around. On top of all this, the conference call was very bullish, with the CEO saying the stock is seriously undervalued. I would be interested in your LOGIC as to why Creative stands to fall considerably, and PLEASE provide reasons other than the charts. -Doug Fowler