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

To: Robert Douglas who wrote (198)	2/3/1999 8:28:00 PM
From: Ram Seetharaman	Read Replies (1) \| Respond to of 376

$ 20 BY SUMMER IS REALISTIC AT TODAY'S VOLUME SPURT LEVELS. THREE ANALYST RATED THE STOCK AS A BUY TODAY (ALL GOOD INVESTMENT HOUSES). IF IT CROSSES $ 15 BY FRIDAY (HOPEFULLY THERE WILL BE A MARKET BOOSTING EMPLOYMENT REPORT ON 2-5-99!), THEN $ 20 IS A PIECE OF CAKE!

To: Robert Douglas who wrote (198)	2/4/1999 1:28:00 AM
From: P314159d	Read Replies (1) \| Respond to of 376

I like your analysis Robert and let me add some thoughts. I was compiling some Q4 stats on the various EDA vendors, today after I got MGs new data and these figures are intriguing. Co. shr$ MktCap Book Sales Q4 RvG Q4GM Q4ROS Q4ROE -------------------------------------------------------------------------------------------------------- SNPS 56.8 3900m 12.8 718m 13% 88% 22.4% 17% CDN 31.3 6800m 3.4 1200m 22% 78% 22.5% 41% MENT 13.6 900m 4.5 490m 19% 79% 8.6% 19% On a future growth basis, Mentor competes on GM and growth, but lags in the profit area because of excess expenditures over the past. The latest qtr showed major changes in net vs. sales. So Mentor should see great gains in the Return On Sales figure going forward. ( The upside earnings surprise you elude to). But look at the following value figures to show Mentor's undervalued status. Co. shr$ MktCap PBV P/S '99eps '99 PE -------------------------------------------------------------------------------------------------------- SNPS 56.8 3900m 4.4 5.4 2.50 22.7 CDN 31.3 6800m 9.2 5.7 1.45 21.6 MENT 13.6 900m 3.0 1.8 .60 22.7 So P/s and PBV are very low and so are the earnings estimates which should prove to be wrong for this year but way off for '00. Of course '99 stock prices reflect next year's prices so upside surprises should be ahead of us. Consider Robby Stephens upgrade today which increased '99 eps to .78 and '00 to 1.00. that estimate gets you to low 20s within a year. Based on .78 figure the stock can trade up to 17 near term. Future quarters will help the move beyond if Mentor delivers. I will take a stock like this in this overvalued market because I know it has limited downside and the earnings look positive. Then we have that beautiful chart along with it.

To: Robert Douglas who wrote (198)	2/4/1999 8:28:00 AM
From: ricky	Read Replies (1) \| Respond to of 376

Robert, Mentor Graphics has more overlap with Cadence products. Synopsys is the premier synthesis software provider. They are the undisputed leader in the industry, Mentor has the best back end tools (pcb layout) and has the most complete CAE/CAD tools. Mentor has improved their product offerings significantly in the last 18 months. They offer the "complete" package to customers (Design, Simulation and Layout). Synopsys provides models that are compatible with Mentor Simulation tools. MENT and SNPS should merge. This would create an industry powerhouse. Ricky