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

To: Mr. Pink who wrote (19751)	6/29/1998 7:36:00 PM
From: Judge	Respond to of 31646

Gee, $75,000 in net income per employee doesn't seem so high. If Tava charges $1500 per diem for each engineer, that would be $225,000 gross per annum if each engineer works 150 days per annum for clients and $300,000 per annum if each engineer works 200 days for clients. It wouldn't be very difficult to net $75,000 per employee under that scenario, especially if there's a pass-through of travel and out-of-pocket expenses....

To: Mr. Pink who wrote (19751)	6/29/1998 8:28:00 PM
From: Bill Wexler	Read Replies (1) \| Respond to of 31646

TAVA grossly overvalued. Interesting point about valuation per employee. Since this is essentially an IT consulting firm, lets compare it to a real company...such as Keane KEA Revenues last Q: $210,000,000 Net income last Q: $20,000,000 ROE: 23.5% Market cap/number of employees (approximate): $390,000 TAVA Revenues last Q: $11,600,000 Net income last Q: $301,000 ROE: -25.5% Market cap/number of employees (approximate): $500,000

To: Mr. Pink who wrote (19751)	6/29/1998 8:42:00 PM
From: Richard S. Schoenstadt	Respond to of 31646

Mr. Pink, Who said anything about 30,000,000 million after taxes. That would be a profit of about $1.20 per share. I certainly didn't make any statement like that. In fact I just recently posted an estimate for year 2k revenue and earnings that came to .60 a share. So cut your numbers in half, read Judges post, and figure that some of Tava's revenue will include very high margin CD sales and database reports and I don't think it unreasonable that Tava can make .60 in fy 99. I wouldn't be too surprised if they didn't meet this but if they hire more employees than the 150 promised I wouldn't be surprised if they exceeded this. That would definitely not help your short hopes in the next 3 to 6 months. Increasing revenues and earnings in an irrational market could drive Tava way up. Long term I think Tava will go well below it's current price. So if you can stomach a possible rise to the 20's or 30's short away. It seems to me that it would make more sense to short then at higher levels rather than now at what appears to be a fairly solid support level. (We do have a long summer ahead of us since Tava won't be reporting until mid to late September. However I suspect Tava will find something to release whenever the stock stays in the low nines too long.) As far as the number of employees making a difference a little bit of thought makes it clear why. By my reasoning most of Tava's earnings and revenues will come from their year 2k work. I figure roughly 250 people will be doing that after Tava has hired the 150 they promised at the last cc. If Tava adds merely another 100 employees to year 2k work, they could increase their profits by 40% to say .84. But whatever they actually make it is clear that Tava is going to have sharply increasing revenues and earnings (assuming the employee numbers we have heard are correct). Simple logic tells me that if Tava has held in the 9 range in the face of disappointing earnings and revenues, it will certainly hold there and most likely go higher when earnings and revenues increase. To me it's not a very sensible time to short when you know that is going to happen -- whatever the fundamentals are. By the way Mr. Pink I also had a very good day. Having gone long on Friday just after the CNBC news came out and got out this morning at the opening. It didn't take any particularly great brain power to realize at the beginning of the day which way Tava was headed. RS