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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Robert Everhart who wrote (10690)	5/5/1998 2:52:00 AM
From: Gene Lee	Read Replies (1) \| Respond to of 14631

Robert, long term, stock price is based on earning growth; short term the price is driven by supply/demand. Therefore, in short term, strong demand can run up the price, and over supply does the opposite. When "big money" buy, the over demand drive the price high, or when they sell, the price fall. The "big money" can play this game only in short term when uncertainty exist. As "small" investor, you need to know you are long term investor or short term player. If you are long term then spend more time on the fundamental and forget the short term price change. If you play short term you have to react to price movement.

To: Robert Everhart who wrote (10690)	5/5/1998 8:24:00 AM
From: Tom Reck	Read Replies (1) \| Respond to of 14631

Robert, Gene gives some good advice in the previous message. I've noticed too, over the past 3 years especially as pension money floods the equity markets through the funds, that the movement of a stock price over the short time is often exactly OPPOSITE of what the fundamentals would indicate. I have no way of knowing, but really suspect that the big boys lay traps for us small guys. The way to beat them is (1) do the fundamental analysis (2) buy low 3) sell high. If you're confident in your initial analysis, and the company is progressing as you expected, don't let the market shake you out. Just as sure as the price goes DOWN irrationally, it goes UP irrationally also. The trick is then to have the SELL discipline to take advantage of the irrational (or manipulative or whatever) price rises. It's often buy on the rumour (wisper number), sell on the news. That's what we've seen with Informix this past week. However, as for Informix, I think this is just the beginning (IMO). They have the technology. They have the management. They have the presence.

To: Robert Everhart who wrote (10690)	5/5/1998 10:17:00 AM
From: Mark Finger	Read Replies (1) \| Respond to of 14631

>>Could someone please tell me how this all happened? IFMX had a >>better run 2 weeks before earnings! Now they get good news on >>earnings and it is struggling to hold on to low 9's. There were a couple of things in the report that were not quite as good as the people were really expecting. First, the license growth was only 4% Y/Y and total sales up only 12%. Remember that Q1 97 was a disaster, so there was an expectation that these numbers should have been a little better. This is really a concern because people want to make sure that IFMX is not another Sybase in the making, with gradual but generally worsening erosion of license sales. Second, $.02 of the profit was due to adjustments in the cost of restructuring (the original estimates in Q2 and Q3 97 were too big, and the actual costs to the company were somewhat less than expected). This is a negative because this means that the operating margin is somewhat lower than first apparent. Third, IFMX needs sales growth, and to establish itself in the high end and in objects before the competition gets there. This last quarter may have shown they have stopped the bleeding, but there was not enough to establish this point. That is needed before we really see stock price rise. Fourth, where is the earnings that will justify any reasonable P/E ratio. It is going to take more that $.05 and $.03 quarters to justify prices above $10. The analysts still have not adjusted their earnings estimates upward yet; most are still expecting only about $.10 combined over the next 3 quarters. That cannot justify anything better than we have now. However, look at the current price. I expect it to settle in a 8-10 range, which is about 15% better than the 7-9 of last quarter. If you annualized 15% per quarter growth, that is 60% for a year. What more do you realistically expect. Mark P.S. Go back and read some of my posts from before the announcement. In one of them, I say that $14 is an optimistic price for November 98, based on reasonable earnings projections (better than the analysts numbers).

To: Robert Everhart who wrote (10690)	5/5/1998 4:30:00 PM
From: RDH	Read Replies (1) \| Respond to of 14631

Robert, This is a valid concern. It seems to me there are several choices. The choices that seem most likely to succeed (IMO) are: 1. Follow, as you call it, the "big money". Get in as they begin to get in and get out as they begin to get out. How is this done? I don't know. Some people claim that this can be done by monitoring volume and intra-day charts. Others claim they can get a feel for this by day to day movement of price accompanied by higher volumes. Certainly it would've made sense to jump on Informix a few days before earnings and get off they day before earnings. I did this with options last quarter, but held on until the announcement; did well. It is dangerous, though, to play with options, so set a price limit before you start (that limit being what you don't mind losing). The second way is to research to find stocks you believe are undervalued relative to the earnings prospects (as well as other aspects) of the company. I bought Informix at 5 1/2 and more at 4. This worked out good for me. However, I also felt Informix was undervalued at 20 and bougth quite a bit at that price also. I have bought at 7 1/2 a little over a year ago. I have also bought at around 8. I have sometimes sold covered calls. Overall I have broken even with Informix if it comes back to 10 1/4. If it goes back to 20, I will have done very well. Overall, I have underperformed the S & P 500, for two years in a row. Since I have don't have a feel for riding on the coatails of big money, and since I don't know when to buy a stock, my approach is to find a company with a good story, where I think the stock is underpriced and buy it. Jump over to www.fool.com for tips on how to value stock; they have the right idea, but they too make blunders (buying OXHP high, selling low, buying COMS much higher than it is now, buying ATC high, selling low, buying ORCL high and selling around 23 and not rebuying it when it hit 18). Perhaps the best solution is to cost average into an Index fund. However, if you can master the buy and hold technique and can pick good undervalued stocks, this is even more profitable. Just be careful with trading too often, or commissions will really eat into your profit. It is not always noticeable; that is why it is a good idea to compare your actual performance to the S & P 500, and your performance when you add back the charges on commissions. - RDH.

To: Robert Everhart who wrote (10690)	5/5/1998 6:41:00 PM
From: Greg Jung	Respond to of 14631

IFMX had a better run 2 weeks before earnings! Well I say its best run was going from 4 to 7. Anyway, earnings seasons, especially this softball of a season, there is a wandering pool of trading money laying bets on a stocks' earnings and taking it out afterwards. This Q there were a lot of ripe stocks for such a play, I admit to doing it in ifmx myself. (However I must protest that I've lost so much I am allowed, for a while, to use any mercenary tactics I can to recover). Although for myself I exited ifmx well before earnings. Being at 8 was already reflective of the hope to beat the -.05 number. Greg