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

To: Daniel Ricigliano who wrote (10799)	5/15/1998 10:05:00 AM
From: tbevan	Read Replies (2) \| Respond to of 14631

Any opinions on this article? Does the fact that Jubak writes on the msn site suggest some bias on his part twds. the microsoft approach to database packaging, or could he be objective. Is he right about Informix positioning itself outside of the fastest-growing segment of the database market? investor.msn.com Dropping Informix (IFMX) from Jubak's Picks is even harder -- oddly enough, because I don't think I'm wrong about the company. I think I did correctly call the bottom of the company's fortunes and I did believe that new management could turn the company around, as it has. Emotionally, I really want to hang onto this stock. "I'm right," I want to yell. "Don't you get it?" But Informix just doesn't pass my returns test. CEO Robert Finocchio, in what I'd rank as the best presentation at the Hambrecht & Quist technology conference, convinced me that he can turn the company into a successful high-end database competitor. Problem is, that strategy will turn Informix into a niche company, locked out of the fastest-growing parts of the database market -- the market for databases customized for specific applications such as managing inventory, and for easy-to-install databases for mid-size companies. So let's say Informix, with its new vice president of sales in place, can get growth going again. Let's say the company actually manages to beat Wall Street expectations. Instead of recording earnings of 21 cents a share for the year ending in December 1999, let's say the company earns that 21 cents in the 12 months ending in June 1999. Six months early -- quite an achievement. On that basis, I'll even give the company a price-to-earnings ratio of 50. It's still a $10 stock. Today, the stock trades at $8.30. If all that goes right, the result is a 20% gain in a year. That's doesn't cut it. I'm dropping Informix from Jubak's Picks. The stock, recommended on Aug. 5, is down about 20%. (Full disclosure: I own shares of Informix; I will not sell them until this column has been up for at least a week.)