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Technology Stocks : Network Associates (NET) -- Ignore unavailable to you. Want to Upgrade?

To: kendall harmon who wrote (4346)	3/18/1999 11:09:00 PM
From: AlienTech	Read Replies (1) \| Respond to of 6021

>>Summary and valuation. At its current price of $35.06, Network Associates is trading at a P/E of 16.4x our expected 1999 EPS estimate of $2.14 and at 4.0x expected 1999 revenues. Given our uncertainty about the current quarter, we are downgrading the stock to BUY. << A leading software company with a P/E of 16 and P/S of 4! So lets give strong buys to companies that have no earnings or visibility past next week. At 50 Ebay was priced too high, At 400 its a strong buy based on growth and the future. So what happens if someone else just happens to throw in a wrench? Remember IBM.. What about motorolla, Apple.. Oh dont forget Boreland. Well how about Novel. All companies without competition and will propel the world into the next centuary. And on top if it all is SGI!

To: kendall harmon who wrote (4346)	3/19/1999 12:50:00 AM
From: Ojing Eo	Respond to of 6021

Here is a summary of the key research report from the Bancboston Robbie Stephens analyst who led to the carnage. March 18, 1999 SYMBOL(S): NETA ANALYST(S): POWERS, JOHN RATING: BUY I got to buy at $31 11/16 today. Great ! Have we not seen these 20% dips in the run-up before quarterly closing and earnings announcements for two years now ? Excellent opportunity for accumulation. Ojing.

To: kendall harmon who wrote (4346)	3/19/1999 1:08:00 AM
From: Will Hou	Respond to of 6021

<<Summary and valuation. At its current price of $35.06, Network Associates is trading at a P/E of 16.4x our expected 1999 EPS estimate of $2.14 and at 4.0x expected 1999 revenues. Given our uncertainty about the current quarter, we are downgrading the stock to BUY. >> This is rather interesting. It seems to me that the stock opened today at 41 and gradually dropped to 35 (steep drop around 11am) then 32.How can this happen?? I mean if the drop was caused by the downgrade (thus the report cited here), wouldn't you see a higher price (41?) cited in this report instead of 35?? Now don't tell me this was written some time last fall! LOL Or, maybe it is not the downgrade that caused the drop today

To: kendall harmon who wrote (4346)	3/19/1999 1:40:00 AM
From: Chuzzlewit	Read Replies (2) \| Respond to of 6021

Kendall, now this is where some analysts have problems with analysis: The greater risk in the quarter may be reflected in a marked increase in Days Sales Outstanding (DSOs)... Ask yourself why this ought to be a concern. It turns out there there are only a few reasons. They are: 1. An increase in DSO may mean that cash flow is slowing. The negative implication of this is that cash which could be used for productive purposes is tied up in a non-producing asset; and/or 2. Customers are not paying their bills on time, and this could signal a problem with a portion of the customer base defaulting; and/or 3. In an attempt to "make its numbers" the company engages in one of two activities: it offers discounts to encourage sales at the end of the quarter (in which case there should be a drop in margins or a substantial increase in SG&A to reflect discount given) and/or the company "stuffs" it channels -- meaning the company convinces its resellers to carry a lot more merchandise than it would normally carry. This practice results in a return of unsold, obsolete merchandise in subsequent quarters. 4. The company is growing rapidly, which inevitably leads to increasing DSO. I really hate it when analysts simply throw out the "increasing DSO" flag as if it is inevitably and unalterably bad. Good financial analysis requires the examining of trends and various other symptoms before arriving at a diagnosis. So when Powers neglects to tell us what risk lurks behind the possible increase in DSO it irks me no end. TTFN, CTC