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Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD -- Ignore unavailable to you. Want to Upgrade?

To: blue_lotus who wrote (2365)	4/23/1998 2:12:00 PM
From: Thomas Haegin	Read Replies (1) \| Respond to of 3115

Neeraj, look for Trevor Price posts over the last 6 months on RATL. Hans-Erik Eriksson also has valuable insights to offer about their products and market standing. The financials / balance sheet are not a problem: Lots of cash, almost no LT-debt. RATL made lots of aquisitions over the last 2 years or so. Then they ran into trouble as integrating the various companies, sales forces and products into one single package took longer and was considerable more difficult than expected. Management itself probably underestimated the task, too. Understandably, the stock took a beating - I think from the 40ies into the low teens - an about 80% loss. The decline was probably aggravated as many investors felt mislead by management and when the bad news began coming out, everyone was quite surprised it seems. As a result, class action lawsuits have been filed, but that's "normal" (IMO) these days. Then last fall, RATL insiders started to buy heavily and repeatedly, giving us here quite intriguing signals as to the future of the company. Meanwhile, the reviews of their products remained good by experienced users like for example Trevor and Hans-Erik (but I'm not one of them). Then RATL produced a good quarter as of 12/97, but WS analysts were still sceptical, meanwhile the consensus here rather was that WS has it wrong. A a result of WS upgrades mainly absent, the stock didn't do all this much. Now the 03/98 quarter is seen as a positive confirmation by WS, I guess. In fact, my take is that the RATL story hasn't really changed all that much since 12/97. It seems that in the 6+ months I'm with the stock now, RATL has made good progress in integrating the company and the various sales forces and products (again, read Trevor). The (relatively new) cooperation with MSFT, or maybe better termed the expanded cooperation (at least I got the impression that it intesified over the last 3 months or so)is seen as positive by management and by WS. Mainly RATLs task was "house cleaning" in the last few years. Now it seems they have cleared up pretty well and start to "bring in the harvest" (sorry for that pitiful prosa <g>). I think the RATL story is looking good: The market projections for their products by "authorities" like IDC and DataQuest are basically skyrocking over the next 5 years. According to plan, RATL should be a big beneficiary / participant. At around $15 or $16 RATL stock is not really cheap with a P/E of about 26 for 03/99, but what really is these days?. If I had no position, I'd be jumping now or soon with a portion (50%) of the funds I'm ready to commit, prepared to pick-up more shares later should prices decline again. Of course, this is all YMHO and - maybe excessively - simplified. Maybe another likes to take it up from here and elaborate on it and correct me. Neeraj, again, take the time to study the postings on this board over the months. It's very useful. I for once benefitted tremendously, for which I, once again, want to thank you all. regards, Thomas