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

To: Andrew Cooke who wrote (24515)	11/5/1998 12:34:00 AM
From: Captain Jack	Read Replies (1) \| Respond to of 31646

Kelsaw "60 % of business is Y2K" --- what % of profits?

To: Andrew Cooke who wrote (24515)	11/5/1998 5:20:00 AM
From: Richard S. Schoenstadt	Read Replies (3) \| Respond to of 31646

N'es pas? No. This is absolutely not a cheap stock - even when you consider the year 2k and far less cheap if you are looking at just the core. Tava is a year 2k momentum play pure and simple. The only question here is when are people going to stop looking at potential year 2k income and revenue and start looking beyond. When they do they will not see a pretty picture - i.e. relative to current stock price. Tava has a fundamental and obvious problem (aside from a relatively small core business of questionable profitability), that bulls on this thread have constantly ignored. And that is the absurdly high number of shares relative to it's size. It's called dilution and it dilutes earnings and it's a permanent anchor on Tava's stock price potential once year 2k is past. Furthermore I am not even sure you will see increased earnings in the coming quarters. I did an analysis back in June which predicted .14 for this quarter. Right on the nose. Except for one slight problem. That was after taxes of 35%. It looks to me like their taxes were only about 2%. Which indicates to me that Tava's tax loss carryover may have only partially ended this quarter. Which if true means there will be an additional 33% hit next quarter. Which to me means earnings before taxes will have to increase another 33% just to remain even. By the way I also estimated 25 million in revenues for this quarter. This was based on very modest projections taking into account their workforce growth and modest increases in cd sales and database reports. And this estimate assumed only modest growth beyond this quarter unless additional people were hired. (Since Tava lagged a bit in their hiring goals, there will be some additional effect in the coming quarters.) The fact that Tava in light of all the promising releases and other talk was unable to meet even these modest goals indictates that even with year 2k stuff they only have limited additional growth ahead. Most (not all) of the longs here who have speculated on the import of past Tava announcements have consistently far overestimated Tava's potential. It looks to me like they are continuing to do that. I would not listen to most of them myself. Tava is a momentum play pure and simple based on short term psychology. Look at that to make your investment decisions. Although a lot of opportunities have come and gone in the past two months, there is still a world of small cap stocks that have vastly better current and future prospects than Tava as investment. Also I would not confuse the fact that Tava's fundamentals are improving with the belief that therefore Tava's stock price should go up. The problem with this line of thought is it fails to appreciate that Tava is currently way overvalued and once the fog of year 2k dissolves this will be clear. RS