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Technology Stocks : CyberGuard Corp. (CYBG) -- Ignore unavailable to you. Want to Upgrade?

To: CatLady who wrote (1713)	6/19/1998 3:44:00 AM
From: uu	Read Replies (1) \| Respond to of 2616

CL: > But subtract R&D and SGA expenses of 5046M and you get a net operating loss of 1673M, which actually looks like (-38%) net operating loss. OK, not the (-41%) from StockSite, but still a big loss. Unless you are new to high tech investing I fail to understand your logic and/or point! R&D expenses are essential to any high tech company that is at the beginning" of its growth. As long as the company's revenues are increasing dramatically any increase in R&D expense should be viewed as a positive sign, and not as a negative item on the balance sheet!! In case of CYBG revenues are increasing very nicely and yes so are the R&D expenses. But to me that is an absolute necessity for the continued growth of revenue. R&D is what will fuel the exceptional growth by offering superior products. Once the market share of the sector is captured by the company (according to its business model) the R&D expenses will become stable while revenues will continue to grow which will reuslt in higher profit margins. As an investor one should realize the relationship between R&D and revenue growth, and not to go strictly by What the company is generating in pure profits at the beginning ot its business growth. But I suppose one can very well do so, however he/she will not be able to claim later that he/she bought the stock low and then sold it high!! A stock is low when no one else wants it, and it becomes high when everyone ends up wanting it! Right now no one (or at least not too many) want CYBG (for similar reasons as you mentioned), but I can guarantee you if they continue to maintain their revenue growth like they have done so during the past few quarters, Everyone will want a piece of the company by the end of next quarter! It is indeed a risk to buy CYBG at this time, but in my opinion a very calculated risk with extremely high rewards! Regards, Addi Jamshidi