I started my AXC position in January and added more about a week ago. I have been considering adding significantly more in the near future ....perhaps when the bottom to this decline looks a little clearer. I have been reading all the great posts on this thread with interest and agree with most of the bullish remarks that have been said about AXC. While I have strong hopes for KM, what it really boils down to for me is that forgetting KM, the Mitsubishi lawsuit, etc.....with the current earnings estimates alone, the current price of AXC looks like a no brainier buy.
Anyway, not trying to get negative, but there are a couple points I wanted to throw out to see if anyone has any comment:
While it seems the EPS estimates have a lot of potential for upside potential, one point mentioned in the 10Q regarding KM may come into play here , (Gus posted this section in post # 2287 ) where it states " The Company anticipates that further development of its keepered media technology will require additional expenditures for capital equipment and an increase in the current rate of its expenditures for research, development and engineering, which have been relatively constant in recent years". I read this to say they plan to pump up spending on KM, which is fine for the long term goal but it also means we cannot very accurately try to guess what earnings will be unless we know how much more they will be putting into R&D.
Another thing that caught my eye in the 10Q is the reduced order backlog. I think a previous poster suggested this is just better inventory management but as I read through the 10Q I didnt see Ampex saying that. I took it at face value, ie bookings are down. Interestingly this seemed to be the case last year as well so maybe it is not a problem, but it did catch my eye.
Anyway, I am long AXC but would be interested to hear any other perspectives or comments on the above.
Bruce |
