Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Gorilla Game -- Ignore unavailable to you. Want to Upgrade?

To: hal jordan who wrote (103)	4/14/1998 12:23:00 PM
From: Clam Clam	Read Replies (2) \| Respond to of 387

Here is what is interesting about SDTI. Its market valuation is now about the same as Verisign's. VRSN is a digital certificate company. Digital certificates play an important role in e*commerce but not nearly as much as authentication and encryption. SDTI has lost its earnings growth and needs to change its ownership base once. A longer term view is now needed to like SDTI. SDTI seems to have the right partners and management to be a major player in security but because there is no fundamental momentum in the business, I would wait for either 1) a quarter or two to pass and reevaluate to see when growth is going to return or 2) wait until the stock gets cheap enough to warrant the risk of the SDTI transition. Its kind of a leap of faith in believing current estimates of $.82 for this year. I don't know if that is a reasonable number or not (and neither do the WS analysts). A low 20's multiple would be dirt cheap and I would place the risk from there very low relative to current information (which isn't much). Therefore, I think the stock is compelling under $20. SDTI will likely never grow 100% y/y so it will never be a hypergrowth stock. This makes it a GARP stock. Once we know more about what happened in Q1 and what the risks are going forward, the stock probably goes back to a multiple closer to what is then determined to be its longer-term growth rate (30%, 35%, 25%???? who knows?)