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Biotech / Medical : Pediatrix Medical Group (PDX) -- Ignore unavailable to you. Want to Upgrade?

To: Tom Hua who wrote (43)	2/18/1999 5:42:00 PM
From: Dr. Bob	Read Replies (1) \| Respond to of 431

Tom, I'm not familiar with TRL. At first glance, however, here are two points which might be pertinent: 1. In PDX case, the SEC only said PWCL had violated the independence rule - didn't say PDX had done anything wrong. In the TRL case, the SEC said they wanted to look more closely at TRL's books. That seems significantly more ominous to me. 2. In the PDX case, the issues in question involve $1.3 million, and the accounts receivable accounting, for which a dollar figure is not given, but as I have noted, might actually require an upward revision to comply with the most recent SEC guidance. In the TRL case, the quoted figure in question is $92.8 million. That also seems significantly more ominous to me. FWIW, Smith Barney has reiterated their estimates for 1999 profits in the $2.30 range, and their buy rating, and the company has said the split is still on. Both indicate to me, from the company and from an analyst, that this is a small issue which will soon be resolved. My guess, which is worth nothing, is that downside is negligible from here (say 18), that short term upside is to 25, and that we will be at 55 by the end of the year, barring a market crash. I think today was the selling climax, and that short covering, along with bottom feeders and value-oriented investors, will begin to support the price at this level. I expect some continued volatility tomorrow, though, as a lot of day trading will still be going on. By next week, though, all the bad news possibilities will be priced into the stock, and any good news, specifically analyst upgrades in advance of the KPMG report, will take us back to the mid-20's. All purely guesswork! Bob