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Technology Stocks : Phoenix Technologies (PTEC) -- Ignore unavailable to you. Want to Upgrade?

To: Jules B. Garfunkel who wrote (3261)	4/20/1999 11:26:00 PM
From: Fred Fahmy	Read Replies (1) \| Respond to of 3624

Hi Jules, Does the company feel that the stock is undervalued?? To the extent that they do or don't will dictate how aggressively they repurchase shares. If management does not step up to the plate at these levels it will be very discouraging. Disclaimer: no position, but considering re-entry FF

To: Jules B. Garfunkel who wrote (3261)	4/21/1999 11:11:00 PM
From: John B. Dillon	Read Replies (1) \| Respond to of 3624

Jules, In the conference call I heard that PTEC will have 18% operating margins by year end. Let's assume that their revenues are flat for 2000 at $125,000,000. 18% of $125,000,000 is $22,500,000. Add $2,500,000 for interest income and we get $25,000,000. If they are in the 30% tax bracket they are left with $17,500,000. There are 26,600,000 shares outstanding. If PTEC buy's back 10% or 2,660,000 shares that leaves 23,940,000 shares. That will leave us with .73 cents a share. If PTEC grows revenue next year by 10% their revenues are $137,500,000. 18% is $24,750,000. Add $2,500,000 for interest and we get $27,250,000. less 30% for tax and we get $19,075,000, or 80 cents a share. At 80 cents a share and a 25 PE we get a target of $20.00 a share, or with some momentum we will get a 30 PE and $24.00 a share. Are my calculations and assumptions correct and is this a reasonable target. What is your target and how do you arrive at your figures? jd