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Thursday, November 02, 2006

Cramer Uses a Chart to Say BUY Quest Software


Cramer also discussed a chart. Cramer usually thinks of the chartists or technicians as the astrologers of the stock market. He likes to look at anaomolies in charts. He found one with an anomoly: Quest oftware (QSFT).

Quest Software is a buyable chart. He said it is suspicious. It is a broken stock with a buyable base. Quest has been left behind in the database stock runs as all the peers have run.

He thinks it is a very back-end loaded quarter where salespeople book all orders at the end of a quarter. He said they missed last quarter, but that is good for NEW holders that haven't owned before.

Cramer said they also have a stock options inquiry. The whole group is being gobbled up by private equity or larger software companies. Cramer likes the balance sheet. It could easily be taken over according to Cramer.

This was a chart in search of a story, and Cramer thinks you have the story now.

I looked at the company financials, and it looks liek it trades at 2.2 times what I use as a tangible book value. It has a $1.47 Billion market cap. It has a trailing 37 P/E.

Jon C. Ogg
November 2, 2006
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