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Technology Stocks : CrossKeys Systems Corp [CKEY and CKY/TSE] -- Ignore unavailable to you. Want to Upgrade?

To: Doug who wrote (420)	2/26/1999 10:51:00 PM
From: Rob Riordan	Read Replies (1) \| Respond to of 792

Doug - I am basically echoing what Glenn detailed in a previous post. When a companies value gets beaten down, such as we saw today with CKEYF it is generally a signal to me to start to accumulate. I do not know where the absolute bottom will be, and I plan on increasing my position again should the price fall to $3 US, but I do believe that the longer term upside is much higher than the short term downside. Since I already stated that I am in it for the long haul, I have already somewhat discounted the short-term gain/risk that your question raises. But to try and answer your question, I see the short-term risk at about $3 with a short-term reward about $5.5. I doubled down at $4.25 so you can draw your own conclusions. I am betting, however, that a year from now, the stock will be at a level that in retrospect will make $3, $4.25 and $5.5 look cheap. Hope I am right. Rob

To: Doug who wrote (420)	2/27/1999 8:01:00 AM
From: Glenn McDougall	Respond to of 792

Tech takes pounding on market CrossKeys plunges by 28% By SUSAN TAYLOR -- Ottawa Sun CrossKeys Systems Corp. was pounded in a hi-tech bloodletting on the stock markets yesterday. The Kanata-based firm's shares sank to new 52-week lows on heavy trading on both the Toronto and U.S. Nasdaq exchanges. The stock sank after CrossKeys warned Thursday night that sales and profits will drop in the next two quarters. Revenue from channel partner Siemens, about 30% of its total sales, will phase out over the next two quarters. Siemens will take development work on a network switch in-house. On the TSE, the stock fell $2.45 -- a 28% drop -- to end the session at $6.35, On the Nasdaq, it plummeted by $1.69 US, down 29%, to close at $4.19. Barry Richards, an analyst with Sprott Securities in Toronto, said the stock market is skittish after a recent spate of corporate poor performances and missed targets. "I know that the stock's trading at $6.50 -- the company's worth a lot more than that," he said at midday. "Longer term, this is one of the better software firms in Canada. Richards rates the stock a buy below $7. He's confident the firm will rebound, though he's uncertain whether that will be in two quarters, as predicted by CEO John Selwyn, or four quarters. "They've really suffered through a lot of Act-of-God events," he said of the last quarter. The future appears promising because the company has new products planned, the possibility of new channel partners, and a strong cash position of $62 million, Richards added. Michael Agarwala, an analyst with Warburg, Dillon Read in New York, said predicting a turnaround is tricky. "Two quarters out is very tough to call -- especially when the recovery is contingent on new products and new channels," he said. "I personally was not surprised by the (warning) that there was market uncertainty. The magnitude was surprising, especially in light of management's confidence." But CrossKeys didn't suffer alone on the market. Fuelled by fears that Compaq Computer Corp. will miss first-quarter sales and profit projections because of slow January sales, hi-tech stocks took a drubbing. "There's obviously some concern within that sector," said Fred Ketchen, managing director of equity trading at Scotia McLeod. "Right along the way ... they were getting beaten up." Major market drops among hi-tech giants, such as Micron Technology Inc. which fell $9.19 US to $57.63, were echoed in Canada. "When it rains in the U.S., we feel the mist," said Ketchen. "We have a tendency to react to the same kind of news." Local network titans Newbridge Networks Corp. and Nortel Networks were bruised on the TSE. Newbridge shares both dropped $1.55 to end at $36.55 and Nortel took at $1.25 hit to close at $87.80. In the U.S., Fore Systems Inc. fell 16% after the network equipment maker said quarterly sales are below forecasts. Investors are worried that earnings may miss estimates. The markets punished a range of hi-tech firms. JDS Fitel fell $1.25 to close at $64.50 and Mitel dropped 35¢ to finish at $10.65. Cognos was one of the few bright spots, rising 75¢ on the TSE to close at $31. Despite the dismal performance by technology, the TSE 300 Composite Index rose 5.90, or 0.1%, to 6312.60.The exchange was buoyed by a strong performance in consumer products and the merchandising sector, which was up 1.75%. Gains by Seagram Co. and other large corporations also offset losses by telecommunications-equipment and computer-related shares. If there was good news to be found, it came from the Canadian dollar. The loonie rose for the first day in six after bottoming to its lowest level in three weeks earlier in the day. The dollar rose to 66.31¢ , or $1.51 to the U.S. dollar, from 66.16¢ cents, or $1.511, yesterday.