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A Postcard From The Edge


Inside Wall Street

A POSTCARD FROM THE EDGE

This is about a stock's survival after a near-death experience. Ultimate, one of the hot companies of the 1980s, faced critical problems after the recession hit. Its once high-flying stock plummeted from 37 in 1987 to 1 3/4 in December, 1992.

"Scary stuff," says one New York money manager. Even so, he's sure Ultimate has a shot at a recovery--and it may turn a profit starting next year. He bought in at 2 and continues to buy even as the stock has rallied to 3.

This pro notes that Ultimate, once a big reseller of mainframe and minicomputers enhanced with its own software systems, is starting to turn around under the leadership of Chairman and CEO Michael O'Donnell, who joined Ultimate in 1988. O'Donnell has discontinued the company's British operations, restructured its debt with Chase Manhattan, and reduced overall debt by $12 million. The company has also started beefing up operations that promise higher profit margins.

One such unit is Computer Support of North America, a network-services company acquired in 1991. Its SUPPORTlink software actively monitors corporate data communications to prevent small technological problems from disrupting operations.

The service has attracted Motorola, Italy's Olivetti, and Memorex Telex. All have agreed to service and marketing alliances with Ultimate. Whispers are that Ultimate will sign up another major company soon. That has prompted one Ultimate bull, Norman Elowitz, CEO of Honey Fashions, to raise his stake to 22.6% from 21.5%. One analyst says Ultimate should be profitable next year "at the rate of 50 a share." He thinks the stock will hit 6 in a year. GENE G. MARCIAL


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