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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Switz who wrote (2689)	6/15/1998 5:02:00 PM
From: Johnathan C. Doe	Respond to of 5944

Book appears to be at $8ish. I'll buy it then.

To: Jim Switz who wrote (2689)	6/15/1998 5:48:00 PM
From: The Philosopher	Respond to of 5944

>>Unless the officers are in jail and the company's going out of business (both unlikely, I guess ;-) ) it sure seems like a ridiculously low price level. My current concern is the observation made here, which I haven't checked, that the decline in Adaptec's quality of growth roughly coincided with the change in management. This suggests the possibilities that the old CEO realized that the end was coming and it was time to leave while still on top, or that the new CEO doesn't have the horsepower to keep the growth going. Is Saviers able to make the decisions necessary to grow this company over the next 5-10 years? Does he have the strategic vision? Or is he an operations man who isn't an adequate leader? I would love some imput from this thread on these questions. If Saviers can return Adaptec to at least a portion of its former glory, the price is indeed low. If, however, Saviers is in over his head, maybe there's a good reason for the price we are seeing. For sure he can't keep letting earnings drop quarter after quarter forever and expect even the current price to hold! Nor can we expect much change in the price if Adaptec keeps grinding out steacy quarterly profits in the $.20 range; with no premium for growth potential a 15 PE is probably as good as it would get, which at $.80 annual earnings gives a price of $12. And if profit margins are eroding because of the switch from proprietary products to commodity products (which it appears to me 1394 is since there don't appear to be any patent protections on it), sales have to up just to hold earnings level, and sales have to go up significantly before you get any earnings kick. So the question becomes, can Saviers produce the right new products at the right margins to get earnings growing upward again steadily? Thoughts on this, anybody?