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Technology Stocks : Xylan -- Ignore unavailable to you. Want to Upgrade?

To: WTSherman who wrote (3427)	11/12/1998 9:35:00 AM
From: WTSherman	Respond to of 4135

I don't think that there is any question about XYLN being undervalued when compared to other co's in the same market. Its especially telling if you look at the price/book and price/sales ratios. XYLN is selling in the same range that COMS is and a fraction of what ASND,CSCO,LU are(particularly price/sales). Yet, the company's growth rate far exceeds these other companies. Obviously, with more risk, being much smaller and not having a broad product line is going to mean that XYLN will be discounted. But, its discounted 70-80%, which seems way out of line to me. This is expecially true when you take into account the increasing profitability of their operations. I generally sell half of what I have a large gain, but, I think I'll hold. The company is going in the right direction and with those ratios its a very tempting target for one of the bigger guys. A buyout almost pays for itself immediately as the new assets will be valued at much closer to those of the acquiring entity than at the target's valuation. So, if one of the 8+ price/sales guys buys them the asset is worth much more to them than it is as a standalone.