If SYSF only doubles in size, it will be as large as PTEC today
(PTEC is currently growing at an annualized rate of 100%,
BEFORE the new Intel and Dell business come on line, not to
mention all the new products just announced, some addressing call
avoidance...although they don't use the same phrase as SYSF).
At 140 PE, you better hope SYSF quadruples in size pretty soon.
Sequential EPS growth was 0%, so you better hope that the "UP TO
several million $" (sounds very vague to me) that Intel/DEC invest in cash,
support, and information is enough to quadruple their business over
the next year or they'll be in big trouble.
You do realize that Intel recently invested $10 million in PTEC to get
better access to technology that "will GREATLY reduce technical
support" requirements. They don't call it "call avoidance", but it
really is when you think about it. Microsoft hasn't said they'd BUY
any of SYSF's "call avoidance" stuff have they? MSFT already
licenses PTEC's "plug and play" technology (avoids calls to tech.
support).
As far as comparing IOMG/Syquest to SYSF/PTEC, the ONLY
similarity is the recent two month stock appreciation difference.
SYSF is fortunate to have a high profile company like Hambrecht
and Quist to promote them to all the big institutions (the price
really took off after their recent investment conference). PTEC
seems to have only one tiny research firm that didn't even change
their price target ($20) AFTER writing about two major PTEC
announcements recently.
SYSF is half as large as PTEC, growing at a slower annualized rate,
and SYSF just lost a major PCMCIA customer to PTEC. While
SYSF just announced an imbedded 386 product for Erickson, PTEC
just announced an imbedded 486 product for NEC and others.
Compaq & PTEC just came out with a joint press release combining
forces "to speed the adoption of Universal Serial Bus (USB)."
The chief technical officer at Compaq describes PTEC as "an
industry leader in PC compatibility with resouces to provide worldwide
engineering support" (Apr. 22, 1996). USB alone will be a HUGE
contributor to "call avoidance".
PTEC has about $40 million in CASH in the bank, while SYSF only
has about $10 million. You know those HUGE buildings that SYSF
identifies (in their annual report) as their offices in Natick, Mass.,
Taiwan, and Santa Clara, California...this is an excellent example of
the SYSF "over-hype" syndrome. Most of the 150 employees that
they have could fit in the broom closets of buildings that size.
I wish that somebody big like H&Q would pick up PTEC. But I think
it's only a matter of time. This is exactly the kind of REAL company
that Wall Street likes over the long haul. Good luck! |
