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Technology Stocks : PROGRAMMER'S PARADISE (PROG) -- Ignore unavailable to you. Want to Upgrade?

To: ria who wrote (108)	1/10/1999 3:53:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 2383

In an effort to see where PROG stands relative to others in its field, I am starting a cursory view of some of these: I started with MZON. Sales last quarter were $124 MM, not much higher then the prior year third quarter of $115 MM. At this level of sales, MZON just breaks even. MZON has 13 MM shares outstanding and traded as high as $60, but has retreated to about $20 right now. here the valuation is a modest $260 MM thus a PSRof about .5 , twice PROG's. I think that one of the reasons it fell back is that they have lost $9 MM in the last 3 quarter and have only $13 MM in cash, if they continue with their losses, they may run into cash problems. On the other hand, this company is doing a much better job then PROG in managing their accts receivable, they have 25 DOS relative to a number around 60 DOS for PROG (note PROG, you can squeeze more then $10 MM in cash from your receivable and almost double your cash position). On the other hand, MZON has a quite large inventory of $32 MM relative to $5 MM or so for PROG (well PROG selling rate is somewhat higher then 50% than MZON, thus the comparative inventory figure should be about $9 MM) In summary, on a PSR basis MZON is twice as expensive as PROG but not performing as well. If one can see MZON starting to make profits, it too could be a target for a double from here, but the proof is in the bottom line, can they expand sales while being profitable. Zeev