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Author: Boxfighter Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 466  
Subject: Good PEG Date: 7/25/1997 5:44 PM
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I have been foolishly screening stocks through MS Investor and came across XETA. 26% 5 year rev growth and 60% 5 year earnings growth. It seems to fit most Fools wants and desires. I would feel more comfortable at $12 a share, but the PEG remains .45. Any other concerns I should be aware of?
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Author: scamp One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8 of 466
Subject: Re: Good PEG Date: 7/25/1997 11:38 PM
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I bought it at 12 1/2 about a month ago. At that time, it satisfied all 8 of the criteria in MFIG, and had a PEG of .42. Basic financials all looked good as well: Cash/Market Cap = 18%; Current ratio of 2.22, and Quick ratio of 1.84; Enterprise value/Shareholder equity = 2.14, which in these overvalued times seemed very good. Since I bought it, it has been trading in the 13's pretty consistently, and their quarter ends next week. So, we should probably see an earnings report sometime in August. They beat the consensus estimate by 14% last quarter, and I hope they will do so again. Their sales depend largely on demand from the hotel industry, and as far as I can tell, this industry seems fairly strong at the moment.

Stuart

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Author: CouchPoDATO One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9 of 466
Subject: Re: Good PEG Date: 7/26/1997 5:04 PM
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For you Fools that already own this baby, the earnings are due on August 27th. First Call and Zack's connsensus are for $.22, which is $.02 lower than last quarter. Maybe I should rephrase that, the only analyst who follows this company has an estimate of $.22! With that said, you really need to do your own estimate on this stock to get a comfort level.

I just started taking a look at this stock (it was one of only six to come through my customized version of the Fool's eight steps - I can't get the IBD so I have to improvize a little) and I wanted to pose some questions to the current shareholders:

1. XETA's biggest products are private branch exchange (PBX) systems for hotels. If memory serves correct, these are the systems that will fry your modem if you try to go on-line without a special modem line. Unless things have changed with these PBX's, I don't see too many of them anymore. Are these the same modem-cookers that I've seen in the past?

2. The hotel and travel industries are booming, and will probably continue to do so for the next 20 years+. As such, there is a great opportunity for all firms connected directly or indirectly to this industry. What is XETA's market share? Are they an industry leader? Is there technology cutting edge? Is there new technology that threatens XETA's postion?

3. How expensive is this stuff? Can hotels easily switch systems, or would you consider this an infrastructure item? Does the company earn material revenue from existing customer (i.e., upgrades and customer support)?

So bulls, whatta think?

CouchPoDATO

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Author: scamp One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10 of 466
Subject: Re: Good PEG Date: 7/27/1997 10:13 AM
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On Sat., 7/26 CouchPoDATO wrote:
>1. XETA's biggest products are private branch exchange >(PBX) systems for hotels. If memory serves correct, these >are the systems that will fry your modem if you try to go >on-line without a special modem line. Unless things have >changed with these PBX's, I don't see too many of them >anymore. Are these the same modem-cookers that I've seen >in the past?

I don't know about this specifically, but the newest product that XETA has is called XPANDER which allows hotels to upgrade their existing PBXs to handle additional phone lines in each hotel room, giving people the ability to hook up their laptops while still being able to make and receive voice calls on a separate line. This upgrade is supposed to be cheaper than a traditional PBX upgrade.

>2. The hotel and travel industries are booming, and will >probably continue to do so for the next 20 years+. As >such, there is a great opportunity for all firms connected >directly or indirectly to this industry. What is XETA's >market share? Are they an industry leader? Is there >technology cutting edge? Is there new technology that >threatens XETA's postion?

As mentioned above, their XPANDER product is cutting edge, and has been designed to work with any existing PBX system, effectively doubling its capacity. XETA sells Hitachi PBXs, and other related products that they purchase from manufacturers. They also recently established an agreement with MCI to market their long distance services to hotels. I do not know what their market share is, but would be interested in knowing myself.

>3. How expensive is this stuff? Can hotels easily switch >systems, or would you consider this an infrastructure item? >Does the company earn material revenue from existing >customer (i.e., upgrades and customer support)?

PBX upgrades and installation are typically expensive. Coming out of the second quarter, XETA had a large backlog in orders, both for Hitachi systems and their XPANDER upgrade, to carry them forward.



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Author: gofisher One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11 of 466
Subject: Re: Good PEG Date: 7/31/1997 12:36 AM
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Still seems like a good PEG, even though I screened it the old-fashioned way with IBD and Zacks. The thin coverage bothers me a bit; one analyst driving things. But phone switching, PBX, etc. is a booming business especially for consolidating industries like hotels. I have a question for you: How does MS Investor work? Is it any easier than scanning the stock pages for strong prospects?

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Author: boxfighter Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13 of 466
Subject: Re: Good PEG Date: 8/9/1997 10:23 PM
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Author: boxfighter Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14 of 466
Subject: Re: Good PEG Date: 8/9/1997 10:29 PM
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MS Investor can be found at www.investor.com. Some of the services are free, but for $10 a month you can access their research services.

Screening stocks is very easy. There numerous screens available for searching, but I used Small Cap, 5 year rev and earnings growth >25%, and avg. daily vol.

Currently you can not screen by PEG, but wouldn't that be nice. If we ask load enough maybe it will come.

MS Investor will not print a perfect list, but I have found several interesting companies.

Good Luck

J.R.



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Author: JackUSA Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21 of 466
Subject: Re: Good PEG Date: 8/30/1997 1:52 AM
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I confess I am a lazy Fool and I am on a quest to find some sort of Internet agent that will sniff out stocks that meet the Foolish 8 criteria. Not that it's so bad readin through IBD and runing the numbers, but if we could get tipped whenever a stock reaches those criteria, we could get to work on that second million a lot sooner.

So, Mr. Boxfighter, my bells tinkled at your mention of MS Investor as a screening tool. Can this program search out and download the data needed to run the Foolish 8 criteria?

Fool on,

JackUSA

PS. Congratulations to all Fools that bought XETA before the 2Q earnings report, released 8/27. I placed my first Foolish 8 buy for XETA on Thursday morning (8/28) and missed that nice lift. AH, well, no crying over market timing, right?



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Author: JackUSA Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22 of 466
Subject: Re: Good PEG Date: 8/30/1997 1:59 AM
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Probably bad Fool etiquette to respond to one's own posting, but I just read Boxfighter's follow-up post on MS Investor. Thanks, no need for another.

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