Hi Miklosh - I suspect the activity for Mylex is two fold. First, Mylex is buying back stock and much of this volume could be their 2nd quarter purchases. Second, July 1st was the begining of the 3rd quarter and I suspect some of the mutual funds that bailed out earlier this year, began to buy back in at these lower levels.
I have been an investor in Mylex for several years and every quarter it is a different story from management (ie. excess inventory, inventory write down, restructure, downsize, one time write off due to legal fees for ousted CEO....). I do not know what it will be this time but if good quality management is put in place, this company could generate some excellent sales.
They have good products, R&D and continue to bring new products to market. They just have a problem managing their inventories and building their customer base. I believe they still generate most of their sales from three OEM partners.
$10-$12 has been the upside if they can put two quarters of back to back positive earnings growth. $20 is possible if they could do four or five consecutive positive quarterly earnings reports.
EKS |
