To: HeyRainier who wrote (916 ) 5/12/1998 6:12:00 PM From: Scott H. Davis Read Replies (3) | Respond to
[Larscom LARS response] LARS is a company that was overvalued when I started looking at them in 96 (I thought EQNX, PTIX and (speculatively) SBEI) were better values at the time. They were overvalued at 15 in early 97. But the market over reacted twice last year. It plunged in July when they met estimates but had nervous "forward looking comments". It oversold in late Dec again. Earnings are .07, .14 .14 -.56 and .09 last 5 qtrs. I can't find the Dec release, but the loss was mostly related to an acquisition. Absorbtion costs were a drain last qtr, but in the Apr. release, the coment was that the integration is proceeding on schedule. Over the past year they have been anouncing some interesting product development and contract wins releases. This is a case for rational analysis - TA alone would not necessairly show that they are recovering from an oversold condition. Looking at the research option under Zacks indicates that it has 1 strong buy and 4 buys, with a projected EPS growth rate of 47%. So combining the TA, FA and what I call "business case" (state of the business, products and its industry) are an important part of the analytical picture, for intermediate to long term holdings that is (I don't do short term trades)
