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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: rupert1 who wrote (4600)	3/14/1998 8:10:00 AM
From: mr. picker	Read Replies (1) \| Respond to of 6980

My computer blew up last week and all I had was the local newspaper. I would not own this volital stock(beta 1.8) if it were not for the internet. Sounds simple minded but watching my investment lose 10% or 20% without BAY's PR and SI's candid analysis would send me knee jerking to CSCO . Joe Sixpack buys CSCO cause it's lumped with MSFT and INTC(as was mentioned twice last week in the local rag). BAY's exposure to new investors by any other means than the internet is limited. Hopefully that will slowly change. I agree with you 100%.The stock is behaving normally IMO. Impulsive. Moody. Volital. Just like the OLD BAY management team. I've seen BAY lose 30% in two weeks(Oct. 97) but I've seen it gain 30% in one week(May 1997). I would describe new BAY management as solid, respectable and conservative . Polar opposite? IMO This stock will not correlate to the new BAY management until House has one entire FY underneath his belt or late summer. other points 1. BAY was back-end loaded Q3'97 and took a similar dive as Bosco mentioned. 2. As you mentioned BAY just needs to make .01 more EPS than last quarter. Since Q4'97 they have grown minimum of .05 per quarter. Do you think that markdowns on the older switches will be greater than the $40M to 60M new revenue from the Accelular line? 3. Intel's emphasis on networking is basically saying that BAY is in the chip business . IMO the software side could be considered a lucrative commodity but hardware dominance is still very much up for grabs. RSP? I rate INTC as likely a suitor as LU. But that and a cup of coffee gets you .. 4. When fund managers comfortly realize that House talks low but delivers higher as INTC has done( for the last 10 years only), then we will see longer term buying and less rumor selling. thanks for you analysis. mr.P

To: rupert1 who wrote (4600)	3/14/1998 2:41:00 PM
From: 5,17,37,5,101,...	Read Replies (1) \| Respond to of 6980

While acquisitions may increase revenue and stimulate analysts' interest, they are not a certainty now, and, even if they were a certainty, their contribution to cash flow is even less certain (see CSCO purchase of Granite; see Quaker purchase of Snapple). I felt that 25% growth assumption for 5 or 6 years was generous. Acquisitions and new R&D developments are big unknowns that really cannot be factored into DCF model. [This IMHO is one of the reasons tech stocks have such high PE's, a phenomenon that Mr. Buffet has not been able to understand himself though he probably uses silicon technology all day long.] So DCF model usually understates the value of a technology company that can develop great technology. When the market recognizes House's accomplishments and his propensity for developing technology, not only will BAY's price reflect net present value, but will also reflect this ability. How long will it take for the market to recognize? There have been estimates in recent posts which seem reasonable: another two quarters or so? More new technology? How high would one expect BAY to go? My guess: $55 or so? Caveat: All of this is complete speculation upon which I have purchased BAY. None of it is a recommendation that anyone else buy BAY. As a matter of fact, I encourage others to sell immediately so I can buy at lower prices. Jackson