To: Robert Scott who wrote (2410 ) 3/20/1999 1:23:00 PM From: michael r potter Read Replies (2) | Respond to
A warning to newcomers who find SFE cheap on fundamentals.. Most stocks that comprise SFE's public holdings are in a vicious bear market. SFEs PE ratio is based on stock sales and marking TLAB to the market each quarter, IE near meaningless numbers. Price to Sales Ratio is the result of over 50% investment in CMPC a struggling 2.2B$ seller of computer equipment and services that the market values at around $3.50 sh. [Dim View]. Ignore any reference to value when you hear it. SFE's continued stock performance will depend almost entirely on perceptions of them as a big internet play. A continued influx of new investors with big imaginations and a fair dose of greed is required for continued appreciation. Fortunately, their is a large potential pool of "investors" with those characteristics and the float on SFE is quite low [think of it as limited # of tickets for admission]. Measuring supply/demand is critical and luckily, success draws attention which breeds success and more attention. [Monica and CMGI?]. That process started only a couple of weeks ago with the one day spurt from $40 to $48. Technical analysis is helpful as it is a graphic representation of investor psychology and resulting supply/demand. Monitoring boards is useful for gauging sentiment and supply/demand even though many of the thoughts and opinions expressed are total uninformed *****. Some of the comments are right on, and it is very easy to spot the difference. I have great respect for SFE management and I think the future has never looked brighter for them as a company. The stock is a different matter, and while it can go much higher in this manic environment, be very careful in differentiating the two. Value may not matter in the short-intermediate term, but in the end, value wins out. There is money to be made, but one should be very careful in evaluating the forces driving SFE stock, watch them, and not be distracted [decieved] by forces that are not. Before this is over, a lot of late-comers are going to rue the day they believed SFE was "cheap" [Don't go out and sell Monday, I'm long SFE <g>] Cheers, Mike
