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Technology Stocks : Ascend Communications-News Only!!! (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: w2j2 who wrote (1218)	2/21/1998 10:17:00 AM
From: blankmind	Read Replies (1) \| Respond to of 1629

from barron's online - not the entire article (see bold) Monday, February 23, 1998 By the Numbers A hedge fund run by quants mines data for dollars By Kathryn M. Welling An Interview With Wesley McCain and Jeffrey Sanders ~ The pair are something of an odd couple. Wes is a former finance prof who left Columbia University in 1971 to set up his own shop, Towneley Capital Management in midtown Manhattan; it now manages some $400 million in the three top-ranked Eclipse mutual funds. Jeff's route to Wall Street was more circuitous: Math and geophysics degrees from Cal Tech took him into the oil business, from which he morphed into an investment banker, securities analyst and portfolio manager. And now he keeps the Street at a decided distance, working out of Boise, Idaho. What they have in common are their Libre Partners hedge funds, and the exceedingly quantitative fashion in which they run the $40 million in those partnerships. We talked recently about why they eschew the more familiar kinds of research and what sorts of things they've mined out of dusty old financials to produce market-beating results -- despite being hedged with shorts -- since Libre Partners was launched in '92. -Kathryn M. Welling Q: What else are you short? McCain: We have been short Ascend Communications since last March, so it's been a good short for us. But it's starting to rally pretty fiercely -- even though it still ranks pretty high on the short side. Sanders: It sure does. It's one of our top-ranking shorts -- meaning most expensive, trading at 7.2 times book value. McCain: Not to mention it's 5.5 times revenues, 43 times cash flow. Sanders: There are lots of people in the communication business and there are lots of products. When one company is making a lot of money, that just gives someone else an incentive to come up with even better products. Ascend is not necessarily in a sustainable position. McCain: One of the marvels of capitalism is that high growth rates attract a lot of bright, serious competitors. And the market does mark these stocks down-eventually.