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Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (2455)	6/4/1998 8:39:00 AM
From: Kyle Klatka	Read Replies (1) \| Respond to of 3115

Buyback Info found on Yahoo Site The company has already purchased 3 million shares as part of their stock repurchase plan. I guess they like the price at these levels. From 10K: At May 28, 1998, the aggregate market value of Registrant's voting stock held by nonaffiliates was $1,292,084,000. For the purposes of the preceding sentence only, "affiliates" is deemed to consist of executive officers and directors. At May 28, there were 86,499,328 shares of the Registrant's $0.01 par value Common Stock outstanding. (This number does not include the 2,955,500 shares which were repurchased by the Company between April 29, 1998 and May 28, 1998).

To: Elroy who wrote (2455)	6/4/1998 12:10:00 PM
From: Alomex	Read Replies (1) \| Respond to of 3115

Successful software companies (MSFT, SAP, PSFT, BAAN, SEBL, many others) trade at much higher sales and earnings multiples than RATL. On a valuation basis for software stocks, the company is inexpensive. Look at revenue growth PSFT: over 20% per quarter MSFT: 8% per quarter BAAN: 15% per quarter (except last quarter, which caused a 20% drop in share price). SEBL: 20% per quarter If you look at earnings the growth is similar. Now look at RATL. Almost zero revenue growth (using consolidated statements) plus several quarters of losses followed by tepid earnings. Currently, the stock price has a built in assumption that earnings will normalize and stabilize at nearly twice the level they are now at.