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Technology Stocks : ORFR-ORBIT/FR -- Ignore unavailable to you. Want to Upgrade?

To: Naggrachi who wrote (349)	4/6/1998 10:30:00 PM
From: Doug (Htfd,CT)	Read Replies (1) \| Respond to of 475

Why buy ORFR now? Fundamentals. Right industry at the right time. Low price about 1 year after IPO. I look at the Yahoo Profile to get a 'fast picture' on an issue, then study its financials via press releases and EDGAR, and consider what little I know about the industry. Profile at biz.yahoo.com tells us several things confirmed by study of their financials: 1) High profit margins (gross over 40%) and high return on equity (over 30%) indicating pricing power and market strength (confirmed by some homework) 2) Low price-to-sales for such a profitable (15% after tax) company. 3) Low price to book value ratio (3.38) 4) Cash on the balance sheet (about $2.50/share), enabling more acquisitions even though stock price (about $10 now) modest. Further study and background in wireless communications investment indicates: 5) Excellent industry for expansive growth: satellite communications, microwave test equipment. 6) Continuing growth in sales (up 30% Q to Q) interrupted by shortfalls in Asia due to "Asian flu," with continuing strength in Europe and USA. 7) Expenditures for sales & marketing and R&D doubling year-over-year while G&A up only 18% y-o-y, indicating a forward-thinking but expense-conscious management. 8) EPS depressed y-o-y by issuance of several million more shares in course of past year, while gross profits continue to rise. 9) Small float (about 2 million shares) which can lead to rapid rises in stock price in times of rapid earnings growth (as happened in the July 97 - Sep 97 period). 10) "Lumpiness" of earnings which can scare away 'weak hands' during periods of quarterly earnings shortfalls due to temporal causes, and concomitant downward pressure on share price below fair value by short sales by 'momentum' players. 11) Excellent prospects of earnings recovery in the next 12 months and continued earnings growth thereafter. These all add up to an attractive opportunity to accumulate shares of what appears to be an excellent business at a reasonable price about equal to the IPO price almost a year ago. So, that's my story. Now, tell us why you said: "It ain't looking pretty, here in ORFR land. :-(" Unless I missed a post, you first posted on this thread on November 19, when you seemed bullish at higher prices. So am I wrong, or have you only watched this issue going down? For one who held off buying until the fever had broken, its looking prettier and prettier every day. I've only filled 1/3 of my quota for this one. Doug (long ORFR)