Alliance has made inventory charges of $6mil each in both Sep. and Dec. qtr. The EPS for the qtrs are -12c and -6c respectively. However, the street uses the raw figures which exclude any one-time charges and/or gains, therefore excluding the $6mil charge, the Sep. EPS was -2c. That translates DEC.'s EPS at +6c, which is 5c higher than consensus +1c!!!
More significantly, the +5c EPS was achieved from the revenue of just $24mil. The COG was only $25 - $6 = $19mil, which means the profit margin for the goods sold has increased drastically. This is an extremely encouraging sign!
Since, as we know, the DRAM price has started to move higher, it is possible that the inventory value could go up in the March qtr if the trend continues, i.e. Alliance may add back some of the charges they made in the Dec. qtr. This could bring some extra value into Alliance's balance sheet!
Plus the fact as we already know that the March qtr's booking is strong, and USC's contribution in March qtr should reach >$4mil (as the Dec. qtr was the best qtr for USC), and the possible IPO of USC, and the flooding of the new products Alliance pours into the market, etc. etc... The conclusion from all these signs - now get ready for this - we might see a double digit EPS in the March qtr!!! If that happens, we will see ALSC trades at $13 as Lehman predicted!!!!!
Guys, what are you waiting for? $10 when every ANALyst recommending ALSC? Com'on, go get it now, or else you could kill yourselves later on!
Good luck to us all!
MB
P.S.
Ken, I just want to simply ignore you, 'cuz you've been proved wrong time-and-time-again. You lost every pent you have in SIII in chearleading it. Now you come here to make more bad judgement. Why you always stand in the wrong side? What a shame! Wake up! It's not too late to make up some of your losses in SIII if you buy ALSC now - if you still have any money left that is!
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