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

To: Brian Lempel who wrote (8956)	1/25/1998 8:07:00 PM
From: partman	Read Replies (1) \| Respond to of 13925

All this speculation about CREAF's open tommorrow will be solved in about 10 minutes when the market opens SES. A big move one way or the other will be the harbinger of what is to come tommorrow on NASDAQ. In my opinion, if CREAf remains unchanged or rises to the US price of 19 7/8 it would be very bullish in the short term. My take on the conference call is this: The main reason that CREAF has a low PE (or that any stock has a low PE is due to the future prospects). In some cases like GM, railroads, and utilities this is because they are in mature industries and growth is limited. The main concern about CREAF was never ASIA (only as late). The primary concern is that they only have one product, and that their other products are commodity items with little pricing power or barriers to entry of competitors or knock offs. It was always recognized that CREAF was well managed and had an excellent distribution system, but the reward for excellence in peripherals as of late is survival not prosperity. CREAF is primarily a manufacturing company that deals with short product lifespans. This is a tough racket, just ask the drive makers. The difference here is that CREAF is going to benifit from the megatrend of low cost computer boxes which will extend the life of their products, create additional revenue and increase margins further due to longer "after ramp up" time. In short, the long term prospects for CREAF couldn't be better. The main thing they have going against them is their location and the industry they are in. Their location is only a percieved strike against them, but the cutthroat industry is a real problem. CREAF has convinced me that they are differentiating their product line and have the megatrend of cheaper computers going for them. Long term we will be sporting a PE much higher (not of a growth company, but certaily of a manufacturing company). I am long 7000 shares for what it is worth and expect CREAF to outperform the market for 1998 and throught the year 2000.