Steve, some comments.
I think that a private investor with the proper skill set and the time
can cultivate a relationship with a small cap company's management and have almost as good a clue as to what is going on as any analyst, with one important exception - the analyst has much easier access to info on the general industry environment. In fact, I would say that until recently (Soundview's arrival) I could identify 3 individuals who knew more about Xicor and its prospects than any analyst.
As far as buying that stock for sale the day it hit $11 1/4, it is essential to deal with a market maker that WILL buy/sell on behalf of a customer before the opening. That trade was essentially done before 9:30, if you looked at the individual trades. A discount broker won't do, or at least the one I use - which is one reason I have a relationship with a small firm that has a trading desk.
In my opinion, Xicor will not "be a $500mm company sometime in the next 2-3 years". The company has too great a dependence on old products and the cycle is too long from conception of a product to final sales in volume for there to be the kind of progress that would be required to hit $500 million in that time frame.
I think that it would be a stunning achievement (not expected by me) if 2001 were $250 million sales, made up of $125 million proprietary goods plus $125 million commodity, versus perhaps a recent run rate of $25 million proprietary plus $95 million commodity.
Despite this view, I do not think it would take even $250 million sales to hit a $29 target in either 2000 or 2001. I think this is an earnings story driven by eventually dramatically better margins and "solid" sales growth. If they were to achieve dramatic sales growth as well, then I think we would then be talking about much higher (LLTC, MXIM style) valuations and a price a lot higher than $29. |
