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Biotech / Medical : Catalytica Energy Systems, Inc. (CESI) -- Ignore unavailable to you. Want to Upgrade?

To: gmccon who wrote (1137)	4/12/1998 11:56:00 AM
From: Bruce Rogers	Read Replies (1) \| Respond to of 1514

I'm sure Mr. Houston can and will answer for himself, but I assure you he LOVES this stock. It is totally appropriate for him to remind us of how front loaded the Glaxo deal is--particularly if people are speculating that the stock is up based on expected 1998 earnings and there is reason to believe that the drug side of the business might even decline for the late 1998 quarters. I don't think anyone on this board is short the stock, but I for one appreciate any cautionary words.

To: gmccon who wrote (1137)	4/12/1998 5:27:00 PM
From: WTMHouston	Read Replies (1) \| Respond to of 1514

Greg: I have been in this stock and on this thread for a year now. My average cost at this time is around 11. CTAL has been my biggest single money maker over that time. (I have been in and out many times). As much as I like CTAL, I am realistic as well. You state: <<Betting against Glaxco [sic] and Pfizer's future discoveries...>> Well, no. But, Glaxo and Pfizer future discoveries have nothing to do with CTAL. << It's future earnings that provide value as much as anything.>> And, it is a single earnings disappointment that tanks value as much as anything else. The risk of an earnings disappointment is worth paying attention to IMO. <<Point is, we're getting in on the cheap here with virtually no risk on capital.>> I disagree...on the cheap was early last year around 4 or even a month or so ago below 11....around 16 and just having hit a new 52 week and all time high is hardly "on the cheap." I also disagree that there is virtually no risk on capital unless you are talking about a 3 to 5 year time frame. If you are talking the rest of this year, I think that there is a better than even chance that we will get an opportunity to buy it below 13 again. If your point was that at some point those that buy at 16 will make money, then I agree. However, it could be several months. This stock has a history of marching forward quickly and then giving much of it back as the momentum players move on to other things for a while. I'd rather buy on the dips than at the peaks. Last year when some good news started coming out a lot of people on this thread were "predicting" $20 by the end of the year. It was only a pipe dream. If you look back through posts on this thread, you'll see that I said so then. One firm had a 12 month target of $23 in the fall of last year. I think CTAL will be hard pressed to reach that by the fall of this year or even this year, absent some large new contracts for the pharmaceuticals. Despite all of the positive developments, I don't think that CTAL can justify and maintain a billion dollar market cap at this time. I have added and sold strategically. If it drops back below 13, I'll add some more. If not, then I'll play what I have. Adding more at this level at this price is, IMO, paying too much right now. The future is bright for this company, but, as they have repeatedly warned, there will be bumps, and sometimes large ones, along the way. Those that bought around 15 in July and August of last year have had to wait a long time just to get back to even. Those that loaded up around and below 11 a little over a month ago are sitting pretty. Interestingly, throughout all of your post you never dealt with any of the content of why I suggested that there was reason to be concerned about earnings later this year. XONON is unlikely to affect earnings this year which means CTAL will continue to depend on the pharm plant - a lack of replacement business there could make it tough to make the earnings predictions later this year, IMO. Personally, I would rather expect less and be surprised than expect too much and be disappointed. Troy