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Radware Ltd. (RDWR) Message Board

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  • eric_michelle_2 eric_michelle_2 Dec 1, 1999 4:15 PM Flag

    another MM game for Shushkidude 2

    Okay, let's say mm manipulation is not as
    powerful as folks out there thought, and RDWR is down due
    to valuation reasons. Can you provide a solid (NOT a
    RANDOM number, say, low 20's) analysis to convince folks
    in this board that RDWR is not worth even 42, but
    only 30 or 22, etc.

    Since you're in the
    business for 21 yrs, I am willing to trust your analysis,
    if your analysis is indeed trustworthy.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • you may want to explain why the guy raised the price target to 85 from 60 even with that 4 mm estimate.

      • 1 Reply to cje_98
      • why? because hes looking like a schmock having
        pushed the stock down the retail and institutional
        clients of his firm only to see it plummet 50%..hes
        trying to hype it up again- to no avail ,
        obviously.
        he raised his target to $85 when the stock was at 80
        on nov. 3rd...this is why u dont trust an invetment
        banking analyst..since the stock made a tremendous run
        and obliterated his previous target of $60 he was
        left with 2 choices:
        1) downgrade the stock
        2)
        raise the price target
        of course he chose 2, because
        of the banking relationship with the company, ssb
        still wants to do the secondary...and trust me guys, a
        secondary will come, probably within the next month or
        two..dont forget, the company only got $18/share in the
        ipo..theyll do a secondary for 25-30 ..u can bank on it...and
        thats why the analyst never downgraded the stock, when
        they should have,had they been objective.
        when that
        secondary comes in, well, i guess it would be hard to make
        even the paltry 25c/share
        for 2000...dilution,
        dilution
        live and learn

    • well, first of all i like the challenge in your
      question.
      heres a way to try and get to a reasonable
      valuation:
      rdwr's mkt value is about $633mm as of the close
      today.
      look at ffiv, its mkt value is about $2660mm (fully
      diluted)
      ffiv's sales growth rate as seen in the last qtr
      released is roughly 4 times rdwr's.
      since no analyst is
      basing his valuation on earnings with these companies i
      contend that rdwr merits only 1/4 of ffiv's mkt cap only
      based on the sales growth parameter.
      that makes it
      about $665mm.
      lets go further in the analysis,
      as
      rdwr is losing money and ffiv is making money already
      i contend that ffiv deserve a further premium over
      rdwr, furthermore, since analysts now expect only a 10%
      increase in sales from 3qtr 1999 to 4thqtr 1999 in rdwr ,
      i contend that that premium should be
      significant.
      as any mkt maven will tell u, ffiv deserves further
      premium just on account of it being a larger cap
      stock(cant help it, theyre in vogue these days- i dont agree
      but i never fight the tape).
      i view a 33% discount
      as a fair one for these 3 items and thus i arrive at
      a fair mkt cap of
      $443mm for rdwr based on
      these assumptions and facts. that translates to roughly
      $30/share.
      now, i truly believe the stock has been hyped
      dramatically ahead of earnings due to the blockbuster numbers
      posted by ffiv..everyone expected them to come with a
      huge number, certainly a profit and they did
      not.
      also, all the news about the deals with lucent etc. had
      been leaked long before the actual releases...all that
      generated a speculative bubble that burst the day the qtr
      results were released and has not mended itself
      yet.
      the mkt over reacts to the upside and will over react
      to the upside too, thats why i believe the stock
      will continue to go down below my percieved fair value
      of 30...i will be buying more in the mid 20's and
      low 20's if the mkt(nasdaq) will over correct and
      flush out the poor shareholders that bought this thing
      out of pure hype.
      hope that answers your question

      • 1 Reply to shushkidude
      • Thanks for your both analyses (good ones!).
        Sounds like a very dim future for RDWR. If it dips to
        25-30 something and you get in, what do you expect its
        future price target, i.e., do you plan to be Long and
        riding it back to 50's or even higher (if you believe it
        will), or get in around 25-30 for just daytrade?


        --If for daytrade, what difference it makes if you get
        in at 28 or at 43? I have been long for over 1 month
        (lose big $$), and I started daytrading RDWR 2 wks ago
        using a different brokerage account (made almost 50%
        loss up already); Plus, if, indeed, it gets to 25-30,
        daytrade opportunities would for sure be gone;

        --If
        you plan to be long after getting in at 25-30, you
        must have some confidence (or a new set of analysis)
        on the future of RDWR, right?

        Do I miss
        anything here?

        Appreciate your response.

 
RDWR
17.300.00(0.00%)Aug 20 4:00 PMEDT

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