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Technology Stocks : Smart Modular - diamond in the rough?
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To: Mark Peterson CPA who wrote (1993)8/18/1999 10:35:00 PM
From: Tradegod  Read Replies (1) of 2020
 
Mark, did you read the release? It's actually pretty good. They're buying Compaq's embedded computer unit and getting about 100 employees world wide. As a result, CPQ is doing some strategic efforts with them. This looks to be a good deal. Allows SMOD to buy some revenue increase at higher margins, and brings along a big customer for it. I would think this would sell well on the street.

As for IR, I couldn't agree more. There is absolutely no reason for SMOD to have allowed estimates to be that high. Dell makes .21 and the street goes bonkers 'cause they had guided them to .19

SMOD should have advised .29 and then come in at .31 . I spoke with a hedge fund manager about SMOD, and when he saw the management team he grimaced. This is not meant to be a prejudicial statement but merely an realistic observation. His commment was that money managers frequently are frustrated when dealing with CEO's who are Indian, Malaysian, etc. Apparently the view is that they are excellent engineers, but naive CEO's. As a result, money managers find it hard to get a clear picture and can get burnt. Therefore, they frequently opt out of investing in such companies. It is unfortunate because SMOD is such a well run company from an operational standpoint, but judging by how the street has treated the stock, I'd say there was some validity to this.

Let's hope for a good day tomorrow.
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