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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (1262)	2/15/1999 9:25:00 PM
From: Boyd Hinds	Read Replies (1) \| Respond to of 1722

Porc, thanks for the info on Scott Black. I also wanted to give you my read of PAIR: First off, let me say that I can't predict the future infrastructure decisions that will make or break PAIR's vision of internet/data access of the future. The competitors in this field are big and the stakes are quite high. In looking at the company's latest quarterly report, the news is quite disturbing for this company. Revenues are way down for the quarter due to the loss of primary supplier status for a Bell operator. For the year revenues were flat. Margins are continuing to erode, and in the latest quarter they declined at an astonishing rate: from 49.8% to 42%. As a result, EPS fell dramatically from .17 to .05, a decline of nearly 71%. R&D spending was also down; not a good sign if your future depends on the flow of new products..... I've said before that I don't try to play many turnarounds, particularly in high tech. Until PAIR can prove itself, why take the risk? Analysts are projecting a decline in earnings for the next year, and I don't want to wait for earnings to recover. Besides, this company has quite a few analysts following the company, all of whom are smarter at judging the turnaround BEFORE the earnings come out. I like to buy into companies that have already exhibited strong earnings growth but have not been discovered by investors. I might have invested in PAIR, but only in 1994 or 1995 when it was still a tiny, quickly growing company. Perhaps Pairgain will strike the motherlode with Avidia, or PG-Flex/PG-Plus will help carry the company as it loses margins in its T1 High Gain products. I would prefer to wait a bit before investing in PAIR. Good luck! --Boyd