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Technology Stocks : Aeroflex (ARX) -- Ignore unavailable to you. Want to Upgrade?

To: Harry Ehrlich who wrote (399)	3/12/1998 2:51:00 AM
From: Kerry Lee	Respond to of 586

Thanks for the insightful TA. All I know is that 2.5 million shares split between 4 underwriters ( Oppenheimer, AG Edwards, Soundview, etc..) is a very small allocation. When the clients of these 4 brokerages are buying in at $10-12, they are going to orchestrate this up to at least $15-20 within 6 months or sooner to make everyone happy campers. My take is that their microelectronics biz is booming ( don't forget minimal if any Asian exposure ) and they probably managed the previous quarter ( don't forget record $60+ million backlog in Q2 ) so that they'll look like heroes in Q3 and Q4. Forget about trailing 12 months PE for the time being and look at rate of profit growth and Wall St support. Since the market cap now comfortably exceeds $100 million, more buy side institutions will pull up stakes which probably accounts for the volume. I suspect the reason we did not blow past 13 was that the institutions have not yet completed their accumulation and don't want to drive up the price too fast before they get all their clients in. PS- I used AMCC and SEEK as recent examples of secondary offerings where the stocks took off soon after. Also look at how USWB has done since announcement of secondary ( after 1-2 day dip it has come roaring back ) and CNCX huge gain after junk bonds were sold. Easy money.Another stock to monitor is ANST which announced a secondary not too long ago. It has not started its run-up ( yet ).