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To: drsvelte who wrote (7465)	2/16/1999 11:04:00 PM
From: wlheatmoon	Respond to of 14427

PnF'ers don't have that kind of leverage. They just point out that some of these stocks are on the way up or down. CTXS and CPWR are on the way down. The downward pressure is simply the market's doing and cannot really be attributed to Dorsey's group. mike

To: drsvelte who wrote (7465)	2/17/1999 8:30:00 PM
From: drsvelte	Respond to of 14427

From Individual Investor; TXCC and INTV Screening for Cheap Small Caps David Peltier and Chris Bulkey (2/17/99) We recently ran a screen to find small cap stocks that have shown marked improvements in their fundamentals over the past year. The first criterion was to find companies that have posted earnings growth of at least 50% year-over-year in the most recent quarter. We then looked for a sales increase of at least 30% on that time frame. Additionally, these ouftits must have exhibited positive cash flow trends. We also looked for companies that boosted Return on Equity at least 25% over the prior year. Finally, we wanted to see improved gross and operating margins over the past year. The stocks we highlighted are merely starting points, so further due diligence is recommended. TransSwitch TransSwitch Corp. (NASDAQ: TXCC) makes chips for the telecommunications market. The company is sitting in the catbird seat, as its chips should be the heart and soul of the next generation communications technologies -- SONET and ATM technologies. These two areas are currently very hot in the field of data networking and TransSwitch has a new ATM product cycle that is now shipping to customers. TransSwitch has been crushing analysts' estimates, beating the consensus in four out the last five quarters by an average of 39%. The company has showed good financial management by remaining debt-free after several years of heavy investment. Book-to-bill was 1.12 for the last quarter marking the eighth consecutive time this ratio has been greater than 1.0. Analysts have been steadily increasing their estimates. BancBoston Robertson Stephens recently raised their FY99 estimate to $0.75 per share, which would equate to an 88% increase from the prior year. With shares trading at 47 times the forward estimate a PEG ratio of 0.54 looks quite favorable. BBRS also notes Transwitch's impressive 65% ROIC, which easily exceeds its cost of capital. The shares are expensive, but growth prospects are high and the industry is in an upswing. The recent market correction has brought TransSwitch's shares down 25% from recent highs, making this a favorable entry point. Intervoice Intervoice (NASDAQ: INTV), which makes call automation systems has consistently boosted profit margins over the last few quarters. That has helped the company meet or exceed analysts' estimates in each of the past five quarters. Insiders have sold a lot of shares recently, but this is most likely profit taking, as shares have risen 150% in the past 12 months. Intervoice has received several new orders and is in position to land a $5 million to $10 million contract, according to Piper Jaffray, who recently upgraded the stock to 'Strong Buy.' Piper is looking for a blowout fourth quarter. With the stock falling 28% from its recent high the shares look quite attractive. There are some concerns, however, that the industry could see a slow-down in the second half of the year due to Y2K concerns. Therefore, it will be important to watch sequential revenues and inventories closely.