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Non-Tech : Any info about Iomega (IOM)?
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From: Jason Wortham5/14/1996 8:31:00 PM
   of 58324
 
>>(i.e.75 X $26,000,000 Net Profit based on 2.6% margin)
<from a post of Frank Waltman>
2.6% margin is rediculously low. Everyone should be aware that margin for Iomega is going up long term. Margin was 5% last quarter, and 7% the quarter before. Yet those figures showed margin going down. The ONLY reason margin went down last quarter was because of one time ramp up costs for the Jaz drive, as well as significant enhancements for the production of the zips. These costs were one time. Margin will climb plenty for next quarter.

You predicted half the margin that they are currently making, and suprisingly you got a stock valued at half that it is currently selling for. HMMM!! Margin WILL go up. Reason: TIE ratios will go up, and disks have much higher margin than drives. It is only logical for Iomega's success to scrap on profits now to reach for profits in the future. They are doing this by allowing extra earnings to slip by so that they can have a higher install base of drives. A higher install base of drives means more disks will be sold. Disks are sold as a rate. Long after drives dwindle off, disks will still sell.

It is obvious that margin will NOT go down, and also obvious that it WILL go up. I wouldn't be too shocked to see a 10% margin, which would double the stock value, according to your numbers.

I'm sorry, I just reread your statement. You foolishly got your 2.6% margin from the margin that Iomega made during _1995_ earnings. Look at the last quarter's earnings. Margin was 5%. Margin is QUICKLY climbing.
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