]> SA Advisory

Snake Bits & Bites

Brief Recommendations

1. Quantum Corp. (NASDAQ QNTM) current price $22.00. The global leader in disk drive market. During 1994 its global market share grew to 23.1%. Current price $22.00 - 46 million shares outstanding - fiscal 96 estimated earnings of $3.07 (year end March) yields PE value of 7.16x - trading at 1.9x book and PSR based upon 1994 result .30. This stock looks very cheap and has not really gone anywhere for years. In October of1994 the company purchased Digital Equipment's disk drive, tape drive, solid state disk drive, and their film head manufacturing businesses and DEC's leading edge magneto-restrictive technology. The acquired units account for roughly $750 million in sales. Revenues are expected to reach $4.6 billion during fiscal 96 and reach $7.5 billion by the year 2000, with earnings anticipated to reach $5/share.
Note: Magneto-restrictive head technology is seen as a breakthrough tech that may dramatically increase drives' storage capacity.
Obviously, the industry is one of the most competitive, but in our opinion, QNTM will remain a global leader and in addition will reward patient investors quite handsomely over the long term. We will monitor QNTM in our 900# portfolio for percentage gain performance.
Corporate Phone: 408-894-4000.
Broker Contact: Greg Nelson, 800-453-9408.

2. Softpoint, Inc. (SOFP NASDAQ Bulletin Board) Current Price 10. Softpoint develops and markets software and hardware point-of-sale cash register solutions for the retail industry as well as for the fast food industry. For the six months ending February 28, 1995, sales exceeded $1.3 million, while losses equalled .016/share (8.8 million shares outstanding) - total stockholders' equity as of 2/28/95 equalled $2.5 million or .28. On May 2, 1995 SOFP announced that it completed the initial installation of its Fast Food Point Of Sale systems, Express 2000 for Food Courts, Inc. The roll out of the Food Courts POS systems alone is anticipated to represent a minimum of $1.6 million in new business to Soft Point Inc. over the next two years. During January, 1995, the company installed its retail systems in Harvey's Hotel and Casino, South Lake Tahoe. Additional contracts are anticipated. "Soft Point 95" addresses the entire spectrum of specialty retail management information needs from point-of-sale through in-store collection and dissemination of store level management information to transmittal of filtered pertinent data to a Soft Point Corporate Host System or other disparitive systems.
S. A. Advisory anticipates that SOFP will turn profitable on increasing revenues. During fiscal 1993 SOFP traded as high as $8.50, while during fiscal 94 ending August, SOFP shares were as high as $5.625. You may ask why is this innovative software company only trading at 10/share as of June 2, 1995? Reason: The SEC is currently investigating prior management dating back to 1992 and 1993, who are charged that they engaged in a complex international fraud which includes inflating earnings through fictitious sales.
Obviously, SOFP stock price has severely suffered during this developing ordeal. But for 10 we believe that investors who have a strong stomach and thrive upon high risk situations that SOFP may indeed offer a great risk reward scenario. Its trades are 66% below stated book, PSR equals .33, new business is developing and earnings may just be around the corner! This is an extremely speculative situation and is not geared towards most. At present we will be monitoring 10K shares of SOFP in our master portfolio for percentage gain performance.
Corporate Contact: Mr. English - 1-702-825-1999.
Broker Contact: Mike Chesler at 1-800-331-1355.

3. Cray Research (CRY). Super computer maker, initially recommend 11-21-94 @ $19.25, has been getting lots press lately. Barons had a positive piece on CRY during the weekend of May 22, 1995, new recommendations have appeared in Fortune May 29, 1995 and June 12, 1995., and recent Smith Barnyard has written a new report on CRY. At present CYR trades at $23 3/8. We still believe that it will double from here during the next 12 - 18 months. Only selling @ 3.9x cash flow, book value around $30 - should brake even during current fiscal year due to transition year and introduction of new products. Earnings during fiscal 96 should be at least $2.50x or 9.3x PE.
Broker Contact: Greg Nelson at 1-800-453-9408.

4. Do you want to play the currency game? S. A. Advisory currently believes that the dollar is close to a bottom with respect to the Yen. It would not be out of realm of conscience thinking that the dollar could rally 15% - 20% between now and April 30, 1996. If you agree and want to play, this is an in-the-money currency warrant - the symbol is PWP.WS (trades on the NYSE at around $6.25) For more information call Greg Nelson at 1-800-453-9408.

S. A. Advisory's Undervalued Hotline
1-900-990-0909 Ext. 192

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