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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jenna who wrote (37728)	5/2/1999 5:32:00 PM
From: Jenna	Read Replies (3) \| Respond to of 120523

DLJ raised price targets for AOL..Following the earnings release, DLJ Securities raised revenue, EPS and price target. They expect AOL to generate revenues of $4.7 billion in FY99, up from $4 billion and $6.1 billion in FY2000, up from $5.3 billion. They believe that AOL should be valued much like a blue-chip technology company such as Microsoft or Cisco, both of which trade at a substantial premium to their long-term growth rates (roughly 50%). Assuming AOL's revenue grows at 25-30% annually, expand gross margin to 50% and operating margin towards 30% and using an average weighted cost of capital of 12.3%, they arrive at a 12-month price target of $200. They feel that the above assumptions are achievable and investors should use any weakness in the stock to add to position.

To: Jenna who wrote (37728)	5/2/1999 7:04:00 PM
From: TimbaBear	Read Replies (2) \| Respond to of 120523

Meanwhile WCOM failed and the other two were great. This leads me to make a change in next quarter earnings plays scans & criteria. This change will encompass all the sectors that were struggling up until now. Don't throw the baby out with the bath water! Remember, that WCOM has this potential merger with Nextel affecting things and arbitrage is having an impact similar to what it had when WCOM merged with MCI. This is likely to be a short term thing.