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Technology Stocks : Carnegie Group CGIX (READY FOR A MOVE?) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas who wrote (79)	7/30/1998 9:37:00 AM
From: Trader Harvey	Read Replies (1) \| Respond to of 110

Many thanks for the feedback on mgm't conference call; however, I don't agree with your analysis re gov't vs commercial mix. Historically, gov't-focused prof.-service businesses have sold at a 25%-50% P/E or P/R discount(all other things being equal) to commercially-focused firms. Some reasons include gov't-imposed cost-plus limits on gross margins(even though there is an offset in that selling costs may be amortized over a bigger, longer-term relationship), higher initial selling costs because of all the complex bidding/proposal requirements, exposure to funding uncertainties. Also, gov't-focused businesses are far less attractive to prospective acquirors who don't wish to have anything to do with the Feds(and their auditing/security requirements).