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Technology Stocks : APSG - Applied Signal -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (855)	11/8/1998 5:41:00 PM
From: Mark	Read Replies (1) \| Respond to of 884

Ausdauer, Good post - thanks. I don't think we should legitimately use the present earnings growth rate as indicative of the future. This is because the recent improvements have been driven primarily by margin improvements, after some years at very poor levels. Now that margins have returned to a normal level, future earnings growth is likely to be driven by the sales revenue growth, which is expected to be around 17%. I think this would be a fair PER value. I'd be delighted if we ended the year at around $1.20 earnings. I've lost track a little on where we are, but think that anything > $1.15 would be pretty good. 17 x 1.15 takes us into the $19 region, so the stock is probably still a good buy. I agree with your comments about the order situation. It's amazing how many people don't get the fact that APSG aren't allowed to shout too loudly about some of their orders because of the nature of their business ! Finally, yes they do seem to get a reasonably steady flow of new orders, but a year or so ago they got a real big one. Regardless of whether it is fair, I think the market believes this big one has been driving the current revenue growth, so unless they see something similar announced to replace it, they'll be wary of the future. Mark