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Technology Stocks : Trimble Navigation -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth V. McNutt who wrote (2525)	6/16/1998 12:54:00 PM
From: Daniel Johnson	Read Replies (2) \| Respond to of 3506

I missed witnessing last weeks price action in TRMB since I was out of the country on vacation. My impression is that the II downgrade may have pushed TRMB past a lot of stops, with a resulting chain-reaction sell off as a result. It's unfortunate that II takes such a month-to-month view towards Trimble. While I see a (long-term) positive benefit of taking steps to increase capacity, II has managed to craft the most negative spin possible. In late-1996/ early-1997 TRMB was pretty much abandoned by analysts (I got my TRMB then at an average of $13). About that time Trimble made some management and other changes to enable a turnaround. Those changes have been highly successful. Lot's of new products, lot's of new markets. So now we are at a point where Trimble needs to expand their production facilities. That should be no surprise- they are selling a whole lot more product. Six months to accomplish that seems reasonable. My rule of thumb is to give about 6 quarters for an action (such as capacity increase) to pay off. Sure, if your time horizon is a quarter or two you would be concerned about capacity and spending to fix it. If you have a 6 quarter time horizon, then this is a great pricing situation - lower stock price today due to short-term concern, plus a clear fix being implemented now to benefit in the long-term. You can buy low and sell high.