Margin Blues...
DMIC has been my favorite for a long time and it still
is... it closed today at $24, down 2+1/2... no news,
no debt, great products, great management, superb future
prospects... the only reason we're down 50% from the
high of $48/sh we reached in early March is that the
Fed has raised interest rates and the whole market is
off... okay, maybe $48/sh was overpriced at the time...
but I truely believe this will grow back there in time.
Look at DMIC's competitor, PCMS... their high was
about $28/sh and now its flirting with $5/sh, so
they're down about 80% from the high... that's
because PCMS is a weaker company - the one good
thing they have going for them is their P-MP product
and that's seeing a lot of competition from Ensemble
(which DMIC is partnered with) and NTRO among others.
Look at NTRO too... they're trading at about $26/sh,
off 75% from their early March high of well-over $100/sh.
NTRO has a few good alliances to help sell their P-MP
product but that's the only product they have... no
product diversification... and Ensemble is poised to
leapfrog them this Summer while DMIC's product development
team will leapfrog Ensemble next Spring... in the interim,
DMIC's P-P products are still in demand and selling VERY well.
Okay, one more company to compare DMIC with is ADAP
(formerly known as CMIC)... they too traded at over
$100/sh in early March and are now trading at less
than $20/sh... off over 80% from the high.
What's my point? DMIC is off 50% and, while that may
seem like a lot (well, it *is* a lot), its competitors
are off 80% and that's a lot more... everything is
down in this market... there's nowhere to hide.
Markets change... they'll re-evaluate these stocks
and they'll all rise... for my money, DMIC is
stronger (in terms of its balance sheet financials
as well as in terms of its technology, product
portfolio, and customer base) than these others,
so I expect DMIC will rise farther, faster, and
sooner than these competitors when the market
does finally turn around and head north again.
In the interim, I'll keep singing those margin blues
while I struggle to keep my portfolio intact. |
