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Technology Stocks : Red Brick Systems -- Ignore unavailable to you. Want to Upgrade?

To: Mark Finger who wrote (235)	4/22/1998 1:45:00 PM
From: Sam Citron	Read Replies (1) \| Respond to of 304

the P/S ratio is currently 2. That is pretty high for a company that is only marginally profitable (on an operating basis). Those that have higer P/S ratios generally also have higher profit margins (generally at least 20% at the operating level before taxes). I don't know of any correlation between P/S and profitability on an operational basis. Intuitively, there should be such a correlation, but P/S can factor in alot of expectations about future growth. If P/S=2 is high, what companies in the peer group have lower P/S? As a matter of fact, please help me to make a schematic of the industry. Who do you feel are REDB's direct competitors (beside the perennial MSFT threat)? SC

To: Mark Finger who wrote (235)	4/23/1998 9:39:00 AM
From: Sam Citron	Respond to of 304

Mark, Earlier I said I do not know of any correlation between PSR and operating profit. I have since revised my view. Thanks for your thoughts. Here is some data that I looked at: Sales Op. Company ($ MM) PSR Mgn. Server Software Advent Software 49 5.7 19 American Software-Class A 103 1.8 7 Arbor Software 70 6.4 -- BMC Software 678 11.4 41 Baan Company 684 11.8 -- Banyan Systems 74 0.9 -- Boole & Babbage 200 3.5 -- Business Objects 114 1.9 4 Clarify 88 3.2 9 Cognos 232 5.1 23 Computer Associates 4,457 6.0 42 Compuware 1,034 6.8 23 Comshare 93 0.8 -- Documentum 76 8.8 11 FileNet 251 1.9 -- Forte 69 1.7 -- Hyperion Software 254 2.9 -- Informix 662 1.7 -- Intersolv 186 1.7 8 J. D. Edwards 703 4.1 -- Logic Works 51 2.6 6 Manugistics 145 5.9 -- Marcam 102 2.5 -- Mercury Interactive 77 7.6 13 Micro Focus 144 6.1 -- Novell 885 4.3 -- Oracle 6,303 4.0 21 Peoplesoft 816 12.3 20 Platinum Software 73 5.4 -- Platinum Technology 624 2.5 -- Progress Software 188 1.8 5 Project Software 98 2.1 16 Red Brick Systems 43 1.4 -- Remedy Corp. 129 3.7 31 Scopus 88 4.3 16 SPSS Inc. 110 1.9 -- Santa Cruz Operation 185 0.9 -- Sterling Software 541 3.6 15 System Software Associates 437 0.7 6 Sybase 904 0.8 -- Systems & Computer Tech. 314 2.2 14 Teletech Holdings 263 2.1 14 Vantive 117 5.2 -- Walker Interactive 71 3.0 1 Regards, SC