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Technology Stocks : Check Point Software (CHKP) -- Ignore unavailable to you. Want to Upgrade?

To: Frank who wrote (2259)	5/2/1998 7:08:00 AM
From: roger	Read Replies (1) \| Respond to of 7150

Frank CHKPF is tough to valuate. Is CHKPF cheap at $28? It has a PE of around 21. But it's P/S is over 14.5 and even higher for Price/Book. But the market doesn't look at only one number. The market worried about future growth. Period. The things that's holding CHKPF up were market position share, growth. The MSFT threat was a threat. The nervousness has always been there. You can see it in the chart. I guess I didn't want to see it. Anyway, what changed me was the sequenial revenue growth. It's only 4%, way below my own expectation. I should have sold it as soon as I see that. It basically took the major support away for the stock. The slow growth meant one of two thing, slowing sale or lower price per sale. Neither one good or reversible. The Ballmer thing came out the same time. MSFT used to be a threat but the market think it's real now. I mistook that it was business as usual. My fault. Then there is this new consulting business thing. It came out after I got out. Well, consulting is labor intensive. That will cut into margin. Consulting firm doesn't sell for 14.5 P/S. May be CHKPF will rebounce from here. But where will it goes? Back to 40? 50? I don't think so. Then Summer is coming. Tech stocks traditionally have problems in summer and CHKPF's supporting elements are gone. May be I'll pick it up later. But at this point the risk is not worth it. By the way, I am not sure GSCO is to blame. They might be able to mess around (which is another thing I don't like), but I don't think they can do this kind of damage with such volume. A lot of big money wanted out. Once hurt, they won't forget soon. So I lost a lot of money, but it's just tuition money. It's only my second year in investing. There are time to make it back. Email me, maybe we can talk more.