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Technology Stocks : DSC Communications -- Ignore unavailable to you. Want to Upgrade?

To: larry pollock who wrote (3414)	1/26/1998 12:57:00 PM
From: Filippo Zucchi	Read Replies (2) \| Respond to of 4429

I may have to eat my optimism in a few hours, but I went back and read the 3/17/97 release re: Bell Atlantic/LU/DIGI settlement and it says that beginning 1998, through 2001, Bell Atlantic would make minimum purchases from DSC for sums consisting of "significant multiples" of DSC prior years sales to Bell. In '95 sales to Bell were $90M and in '96 sales to Bell were $120M. If "significant multiples" simply meant 3x, 1998 sales to Bell should be at least $300M. If sales everywhere else remain flat, DSC should still be able to increase revenues by apprx. 20% to about $1.9B. Using net operating margins of 8% (1% less than Value Line forecast)earnings would be $150M or about $1.30/share. That would make the current PE on '98 earnings about 14, P/S about 1.2, and 1.4x book value. And this is a pretty bleak case scenario. IMHO at $18 they are throwing this one out. Am I missing something? Stay tuned for a full retreat from these satements in about 24hrs. Good luck to all.