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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Tim J. Flick who wrote (17558)	5/23/1998 12:21:00 AM
From: Runner	Read Replies (1) \| Respond to of 31646

Thank you Tim. Have a nice Memorial Day Weekend

To: Tim J. Flick who wrote (17558)	5/23/1998 3:45:00 AM
From: Steve Childs	Read Replies (1) \| Respond to of 31646

Many reasons have been given for the recent price decline: bad CC, bad earnings, institutional holder is selling, not enough PR, CD revenues not materializing, etc. Backing up and looking at the whole forest, the question seems simple: can TAVA produce increases in revenues with sufficient speed and size to capitalize on this near term opportunity, and to transform itself into a much larger IT/integrator player post 2000? So far that question has remained unanswered. And that's the reason for the price decline. There are two issues that distract investors from this central question. 1) It takes companies a long time to see/understand/deal with the problem, and therefore revenues are slow in coming. 2.) The embedded systems problem is gigantic and TAVA seems to be the only serious player. Both issues are interesting, but largely irrelevant. Bottom line is: can Tava produce the revenues within the given time frame, regardless of the obstacles or the opportunities. (qtrly revs in 000's) 3/98 11,667 12/97 10,484 9/97 11,319 6/97 9.556 3/97 11,183 As of 12/97 (first 6 months), there were $1,733,000 in Y2K revenues. The following quarter produced an additional 3,422,000 in Y2K products and services (note wording change), and 8,245,000 non- Y2K work. If I read that correctly, the non-Y2K work is decreasing in direct proportion to the increase in Y2K work, since a year earlier non Y2K revs were 11,183,000, almost the same as this quarter's total revs which include 28.5% Y2K. This in itself, short term, is not alarming. It's just that the Y2K portion then needs to increase at a much faster rate. For this company to have a .65-.70 eps, 30X P/E and a $20 price, assuming a 25% net margin, it needs to produce, topline, an additional 60 million in revenues in the next 12 months, or an average of 15 mill per quarter increase. Next quarter we may see a revenue increase of about $5-7 million. Regardless of what is at fault, this just puts additional pressure on future quarters. Once the revenues are there, the earnings will follow. (Remember when everyone speculated on CD revs of 100 mill, or 20K cds X $5000?) Before the end of Q2 98, Tava said that some Q3 revs would be realized in Q2. Didn't happen much. Then Q3 was to be big. Didn't happen. People are appropriately expecting $10-20 million quarterly jumps, not 1-5 million. Next two quarters will go a long way in answering the question. In the meantime, the price deserved a short term drubbing. And no, the story hasn't changed. And Tava seems to be a great little company. And we'll all be happy some day. But some major work needs to be done to get this to an annual $.75-$1.00/eps post 2000, let alone pre 2000. Soon we should hear the 'popcorn' popping...maybe in the fall.

To: Tim J. Flick who wrote (17558)	5/23/1998 11:07:00 AM
From: M. Frank Greiffenstein	Respond to of 31646

Great post, Tim... How about starting a club? The "Sensible TAVA Traders Who Have Taken Savage Gas from TAVA Bulls and Lived to Post Again" club? <g> I would only add this: It is important to compare new facts to one's idealized investment model of a stock. For my money, the pushout of ramping revenues from the much touted Q3/98 to Q1/99 was a big divergence from the investment thesis. I was unwilling to wait at a share price of $13-14. I am willing to once again "Talk the Talk and Wait the Wait" in single digits <g>. DocStone