Zeev's Turnips Patch-No Politics (ZEEV)

[hightecheast]

Zeev ... re: LSCP ... been out of town since yesterday morning, although I did read the 7 AM earnings release yesterday.

Although, I need to read it again, there was nothing in the news release that looked robust with continued high growth in revenues and earnings in 2005 for this high P/E and illiquid stock.

Several things about the LSCP earnings report make me very cautious for the next few months at least.

1. Unlike every other quarter I remember in the last 18 months, there was no mention made of what the next quarter, Q1/FY2005 (which ends in 3 weeks) looks like.

2. Still no mention of expensing stock options starting July 1 ... and this is a significant issue specifically for LSCP.

3. In every quarter I recall previously, management revised revenue estimates and EPS estimates significantly higher going forward. And now 4 1/2 months after the Q3 earnings report, 2005 still looks the same for both revenues and earnings at $125-130M and $0.75-$0.80 respectively.

4. This is a huge deceleration in earnings. EPS for FY2003 were plus 550% over 2002 ... EPS for FY2004 were plus 400% over 2003 ... and for FY 2005, they are forecasting plus 23% over 2004. With a price of $30.25 right now and $0.65 EPS for fiscal 2004, that's a P/E over 46.

5. There is a gap in the 20-22 area from last October. I think we could fill that and retest 15 again.

6. Maybe good to daytrade, but as a swing trader, I will be very cautious with LSCP.

Ken Wilson