Calvin,
I said that good engineering talent will go a long ways toward overcoming incompetent management. However, I will admit that if management is incompetent enough, it can destroy the efforts of even the best engineers. However, I believe that CRUS management has learned a lot of lessons from the last two years. Their project management and design methodologies were out of control. This has been changed. I think they also learned a lot from the problems with Laguna, although those problems have seriously hurt the company. I do not think they have learned all their lessons or have the best management. But I think they have learned enough lessons and fixed enough of the problems that the good engineers will be able to make the company succeed. Their success certainly won't be that of the grand visions of a $5-billion company in the year 2000, but I think they will continue to be mostly profitable and growing. I can certainly understand your frustration with the stock. I have a position around $14 and am probably better off in that than some. I am not confident that we will see that level near term, but I am optimistic that this stock has a pretty big upside if Cirrus can have another 3 or 4 profitable quarters to prove that the turn-around is not temporary. A lot of uncertainty remains about the capabilities of management and Cirrus' position in various markets, and that is why the stock price is depressed. If those questions are answered favorably, as I am cautiously optimistic that they will be, the stock will go up. I can understand the dissatisfaction of the investors in this stock, particularly those who remember the peak in 1995, but I think it is counterproductive to think about those days too much. Those stock prices were based on a high view of the company that has since been shattered. Similarly, I think the present low view of the company will eventually be dispelled. I also think that concerns about Asia are factored into the present price, without good reason, and that this will eventually help move the stock back up. |
