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Technology Stocks : Osicom(FIBR) -- Ignore unavailable to you. Want to Upgrade?

To: Dennis G. who wrote (6701)	5/8/1998 10:53:00 AM
From: Roger Brown	Respond to of 10479

At least they are demonstrating capability with a $2.3 Billion market capitalization firm....glad to see some volume thus far... Roger

To: Dennis G. who wrote (6701)	5/8/1998 11:01:00 AM
From: Ploni	Read Replies (1) \| Respond to of 10479

It is impressive, as FORE's 10-K says they have their own multiplexer for WAN use. For them to use Osicom's product says a lot. FORE's sales have been doubling every year; FIBR's sales have been increasing very slowly (other than through acquisitions). FORE has been profitable, with a profit margin of about 10%. FIBR has not really been profitable. FORE's profit margin is not that exciting, certainly not in comparison to software companies. Despite this, because of their strong sales growth, and profitability, Wall Street values the stock at 5.5 times sales, or a P/E of 50. David Pawlak suggests, conservatively, that Osicom could do $175 million in revenue, with a 6.1% profit margin. The alternative (higher GigaMux sales) scenario showed $217 million, with a 6.9% profit margin. That's still not as impressive as FORE's profit margin or sales growth, but it's a start. Give FIBR half of FORE's valuation on the basis of P/E and Price/sales, and you come up with $15-18/share. But we probably need to book those sales and profits first; the Street is saying "show me the money." Of course, if FIBR can reach those numbers, and then accelerate them into the next fiscal year, the stock could easily hit $40-50/share. But I don't think we'll see a permanent increase in the stock's price until we have a few solid quarters under our belt. That's the only thing that will bring credibility to Osicom, at least with the present management team. P.S. Where's our NMS listing?