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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Mark who wrote (2090)	5/10/1998 1:32:00 PM
From: Zeev Hed	Respond to of 5944

Mark: You write: "Historically (over the last 5 years), ADPT has traded on a PSR of between 2 and 4. It has had high profit margins and CONSISTANT earnings growth, and so deserved a high ratio. For a company of ADPT's size I would guess a "neutral" PSR of around 1.5 " But you must take into account two additional factors, once the Symbios acquisition is complete, you have to add $600 to $700 MM in sales (no share dilution since they'll pay with the cash they have on hand), and furthermore, they will regain some pricing power. The second factor is related to the fact that that ADPT is, I believe, impacted by a slowdown and margin pressures from the DD segment, a factor that might disappear once the DD segment revives and once stability returns to the rim. Having said this, I still think that in the short term, 19 will not hold. Zeev

To: Mark who wrote (2090)	5/10/1998 1:59:00 PM
From: Paul Moerman	Read Replies (3) \| Respond to of 5944

Let me cite some numbers that to me say ADPT is a compelling buy, just for balance. <g> All the following are from a Market Guide ProVestor Plus Report that I downloaded a short time back (April 27, 1998). I like to look at how a given company compares to industry averages, and I was quite impressed with such figures as follow: ADPT Industry Avg Revenue (TTM) vs TTM last year 23.6% 14.9% Current ratio 5.4 3.4 Return on assets (TTM) 18.8% 4.5% Return on assets (5 yr avg) 19.4% 8.3% Return on investment (5 yr avg) 22.6% 11.9% Return on equity (5 yr avg) 24.1% 13.3% Gross margin (TTM) 61.2% 43.6% Profit margin (TTM) 19.2% 3.1% Profit margin (5 yr avg) 15.8% 4.8% I also was attracted to the $20 price level, as that is near a historically bottom price/TTM Earnings (approx 13) and also near a low price/TTM sales level (approx 2.5, compared to a norm for the last 4 years of 4 or higher. On a risk-reward basis, I reach almost the opposite conclusion from studying the ProVestor material than what I read on your post! I'll be interested on your thoughts of the industry comparisons. Maybe I shouldn't be putting so much weight on them? best, Paul

To: Mark who wrote (2090)	5/10/1998 9:53:00 PM
From: Investor2	Read Replies (2) \| Respond to of 5944

Re: "On this basis the stock is therefore looking like a sell." Now is a curious time to determine that ADPT is a "sell." The 52-week high is $54.25. The current price is essentially at the 52-week low. Before the stock price dropped more than 60%, everyone was singing praises of the great outlook for this well-managed, cash-rich company. Now, when the company may be purchased for only 40% of its previous price, everyone is coming out with projections of doom and gloom. It's funny how that works. Best wishes, I2