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RAINBOW
TECHNOLOGY (Nasdaq:RNBO)
RNBO - (08/04/02 -
$4.14)
Over the past year and a half RNBO (
Rainbow Technology ) has formed
a potential inverse head and shoulders chart pattern. The stock
has
also found support in this area several times over the past 10
years.
RNBO trades at 1x sales and has a tangible book value just over $3.00
per
share. According to their latest earnings statement they have $38
million in cash and less than $1 million in long or short term
debt.
On June 25, 2002 RNBO
announced a stock buyback of up to 3 million shares, which would
account
for 11% of outstanding shares or 16% of the float. The stock traded at
$4 just prior to this announcement.
We recommend purchase at current price
with a 6-12 month target of
$9.
UPDATE:
11/25/02, SOLD AT 8.62 FOR A GAIN OF 108%
See
Performance Page
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