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

To: Scott H. Davis who wrote (852)	5/1/1998 1:51:00 AM
From: HeyRainier	Read Replies (1) \| Respond to of 1720

[ Performance Technologies: PTIX ] Scott, Good job on your detailed post on PTIX. I've actually been following PTIX fairly closely for the past two weeks; I was wondering when that down trend would be broken, but did not act upon the issue after I missed the news-driven breakout. When you introduced this issue to me a year ago when it was about $9.00 (post-split), I thought you had found a gem, and indeed it was. It ran from that price level to about a high of $24--too bad I wasn't in the issue at the time. Back when it was trading at $9.00, it seemed to me that the fair value actually deserved to be in the mid-teens, and so at that time, it seemed a compelling value. However, the relative value of the issue is no longer as attractive as it once was. Before, there was tremendous growth for PTIX, but the stock price at the time was not accompanied by an expanded earnings multiple, which made the issue attractive to both the growth and value school. But now, it seems that with the earnings multiple expansion, the "value" aspect that once made this doubly-attractive has pretty much been factored into the price, and leaves only the growth side of the story to drive future share price appreciation. With trailing earnings of $0.70 and a future estimated growth rate of 22%, it would appear that PTIX would be considered fairly valued at approximately $15.40, or only 2.6% higher than today's closing price. To express it in a different way, it would be like getting a dollar for $0.95. While such an exchange would be beneficial, I do not feel that an adequate enough margin of safety exists for this issue to warrant a long term commitment of my investment funds. Regards, Rainier