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

To: Richard S. Schoenstadt who wrote (18626)	6/17/1998 10:18:00 AM
From: Mr Logic	Respond to of 31646

Richard I agree that there is likelihood of growth over the next few quarters, which looks very good unless analysed too deeply. A very rough estimate: say TAVA has 200 engineers working flat out for 18 months, $1,500/day, 100% utilised, at 25% NET profit after everything... gives about $30m free cash flow. Not much compared to the market cap but we could see consistent, steady growth over the coming few Qs and enough free cash to pay the debts. Estimating post 2000 earnings is very difficult. TAVA's core business is not a glamorous hi-tech, high growth business so my best case inclination would be to assume that they can avoid laying off any staff and get into a reasonable, steady growth phase. Again, generous numbers gives annual earnings something like $8m. Taking the brutal method and applying a 20 p/e, add in the earnings up to 2000, throw in $20m for the CDs and you'vs just about justified today's stock price. The CD sales was going to be the big winner here but seems unlikely now. The requirement for perfect+ execution & no surprises tells me that the upside based on fundamentals is very limited, but that there are better shorts right now. I may well be short again but not unless & until I see this perfect plan go awry, and at the very least see another 10Q. Patrick.