Ken Deen's THE AGGRESSIVE TRADER(tm) "Seeking double-digit profits in one to four months" SELL SHORT ALERT P.O. Box 4791 Vol. 1, No. 87 Santa Barbara, CA 93140 September 19, 1992 (805) 565-2039 9:00pm EDT CompuServe: 72020,2050 Stock+Options Account: No trades Stock-Only Account: No trades DESI Trading System(tm): No trades Other Trading Ideas (these recommendations will not be tracked): Sell Short Recommendation: Borland International, Inc. (BORL, $41.88) Selling Short in a Bull Market? Today's short-sale recommendation does NOT indicate a shift in my bullish stance. I am still looking for a strong rally in growth stocks over the next several weeks, continuing at least through the end of the year. However, in any market, bull or bear, some stocks move opposite to the trend. I expect Borland is headed south regardless of what the market averages do. Sell Short Recommendation: Borland International, Inc. Sales and earnings have been falling off for Borland recently. The latest quarterly report shows earnings of 6 cents, down dramatically from 47 cents in the year-ago quarter, and sales were down 16%. The preceding quarters were not much better. The next earnings report is due out Oct. 25. More importantly, earnings estimates for FY '93 (ends in March) and FY '94 have been falling sharply, as industry analysts have been taking an increasingly downbeat view of Borland's prospects. Against this bearish backdrop, news of a delayed product introduction hit the wires on Friday, sending the shares reeling. The company announced that it will not begin shipping dBase for Windows until next year. Shipments had originally been scheduled to begin early this summer. The stock fell 4 3/4 points on three times average volume. Analysts once again took out their erasers and revised earnings estimates downward. In Monday's edition of Investor's Business Daily, there are three separate articles on Borland's woes -- on page 1, page 13, and page 31. The stock price, at 41 7/8, is still very high, even after Friday's tumble. One analyst cut his fiscal '93 estimate by 20 cents to $1.45 a share. The stock is selling at 29 times this estimate of '93 earnings. I expect the stock to fall below $30, perhaps to $25, within the next three months. Prior to Friday, the stock had been rallying, as the software group led the market higher. This helps us as short sellers because the stock has just come off of a short-term price peak. Expect more heavy selling on Monday, as many investors did not see the news story until after Friday's close. The stock may gap down at the open, which means short-side limit orders may not get filled. I recommend selling short at whatever price you can get on Monday. ---------------------------------------------------------------------------- The Aggressive Trader is edited and published at irregular intervals, but at least monthly, by Kenneth L. Deen ("Ken Deen"), P.O. Box 4791, Santa Barbara, California 93140, (805) 565-2039. Until further notice, it is being distributed at no charge. Ken Deen, his employees, affiliates, and/or clients may have positions in securities recommended herein and may make additional purchases and/or sales in these securities. Recommendations made in this publication involve a high degree of risk and may result in losses. Readers should not assume that recommendations will be profitable or will equal past performance. The information in this publication is collected from sources believed to be reliable, but neither the accuracy nor the completeness of this information is guaranteed. Reproduction in whole or in part without the written consent of the editor is strictly prohibited. The Aggressive Trader, Deen Earnings Surprise Index, DESI, DESI-3, and DESI Trading System are all trademarks of Kenneth L. Deen. Copyright (c) 1992 Kenneth L. Deen. -END-