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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Susan Saline who wrote (5493)	1/6/1999 10:48:00 AM
From: Jay Lyons	Read Replies (2) \| Respond to of 43080

NETA Lost another 1, thinking 56 was the bottom. Sheesh, trade the gaps. Nice write-up, hey? NETWORK ASSOCIATES (NETA) 59 15/16.Before the open, Network Associates (NETA) announced that it will report fourth quarter earnings of about $0.47 a share on revenues of $272 million. Normally, companies don't pre-announce earnings when the numbers are about as expected, but NETA is making a presentation at a Morgan Stanley software conference in Scottsdale, and felt it was prudent to make a public announcement prior to making the presentation. These numbers are pretty good. A $0.47 figure would be the classic penny ahead of expectations, and $272 million in revenue would be up 30% from the year-ago quarter. The stock is indicated over a point higher. NETA makes network security products and used to be known as McAfee Associates. It is one of the top software companies in the world and this year will have revenues of about $972 million. Growth has been extremely strong, and this year's revenue will be up about 40%. There have been a lot of one-time charges affecting profits, but at current profitability, the stock is not unreasonably priced. Annualizing current profits gives almost $2 a year in profits. That puts the price/earnings multiple at about 30, which is actually in-line with the overall market, and NETA does have strong revenue growth and good earnings prospects. The stock is trading near its 52-week high of 67 11/16 after surging in recent weeks, but could remain be a solid performer over the coming year. Business is steady, and growing. They are likely to make an upbeat presentation today, and they have the numbers to back it up.