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Technology Stocks : IQ Software (IQSW) -- Ignore unavailable to you. Want to Upgrade?

To: Mr.D who wrote (116)	5/29/1998 12:49:00 PM
From: Robert K. Schott	Read Replies (1) \| Respond to of 123

Mr. 'D': The most conventional method used by value investors to peg "fair value" for a stock is to place fair value at the current year's estimated eps multiplied by the mean five year estimated growth rate of the analysts who cover it. Therefore, one looks to buy stocks with a current quote significantly less than the issue's currently imputed fair value. Indeed, this method of investing is virtually foolproof, with, however, the BIG proviso that estimates prove at least reasonably accurate. Alas, it matters were this simple we'd all be rich. The problem, of course, is that frequently estimates prove to be woefully overstated. From a value investing perspective, IQSW looks to be at present substantially undervalued, and, therefore, a screaming buy. One of the problems with the stock is that it has scanty coverage, rendering estimates all the more uncertain. It has been my experience that often when a stock appears to be as undervalued as IQ currently looks it is because analysts' estimates are not viewed with much faith. If you have taken a large position in this issue I must assume that you have some reason to believe that the estimates are indeed believable. I am not suggesting that you are the beneficiary of "inside" information; I am merely suggesting that you must have some reason why you believe that the current growth rate estimates are realistic. Given the rather esoteric nature of IQ's products, can one assume that you are personably knowledgeable in this area of technology; knoweldgeable as to the potential market for IQ's products; knoweldgeable concerning the state of, and the potential of IQ's competition? Could you please state your reasons for your apparent faith in the future viability and growth of this company, and your reasons for such a belief on your part? Thank you.