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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: Scott H. Davis who wrote (641)	4/22/1998 11:48:00 AM
From: HeyRainier	Read Replies (2) \| Respond to of 1720

[ Advanced Digital Information: ADIC ] All right Scott, I'm in at 17 1/8. Let's see if the analysts covering this are worth their paychecks. We had that breakout at 17 we've been waiting for for quite a while now. ADIC has a forward growth projection of 27.3% for an 18.2 P/E multiple issue, which leaves potential room for an upward multiple expansion should earnings continue to meet estimates. Estimates have either been met or exceeded for the past 7 quarters I am looking at. ADIC has a current ratio of 4.74, 0% debt/equity, ROE of 17.5%, and is modestly valued from an asset and sales standpoint. Relative to growth, if the multiple expands to meet forward estimates, at a P/E of 25, this would appear to warrant a fair valuation of $23.75, or a 37.8% appreciation from current levels. I'm still watching to see just how disparate ADIC's business is from QNTM's, but I will take the CEO at his word when he says he is comfortable with current estimates. This will certainly be an interesting Rational Trade. Regards, Rainier

To: Scott H. Davis who wrote (641)	4/22/1998 8:01:00 PM
From: HeyRainier	Respond to of 1720

[ ADIC Short Interest and Chart ] Here's the short interest for ADIC for the last 6 months: Month Shares Short Avg Dly Vol Ratio* ------ ------------ ----------- ------ 03/98 1,048,306 153,062 6.85 02/98 1,124,136 105,874 10.62 01/98 1,148,394 152,082 7.55 12/97 1,009,246 195,121 5.17 11/97 496,556 95,034 5.23 10/97 597,523 202,704 2.95 With over one million shares short and 9.71 million shares outstanding, the potential for a short squeeze can be seen as some icing on the cake if the earnings picture develops favorably. Next earnings release date according to Baseline is May 20, 1998, with the First Call estimate looking for $0.27 a share vs. $0.21 a share in the prior period. For the technical picture, I provide the following link to my Web Page: members.aol.com Regards, Rainier