Hello again Cary, I have been doing some research on SVGI (looking to
expand my holdings in the semi-equip sector).
Upon first glance of the financials, SVGI looks cheap. Price to sales,
price to book, price to expected earnings, almost 9$ cash per share.
However after reading some of the 10Q's at EDGAR, I have some questions/concerns that I was hoping you might shed some light on.
1. Do you know the breakdown in terms of sales and/or earnings for the different parts of their business (photolithography and LPCVD)?
2. I noticed that 31% of sales were to one customer. Any idea who it
is? How secure is the relationship? I realize this could change for
the better or worse at any time, but is it worth being concerned about?
3. I copied the below text from one of the filings I read. Any idea
how much profit this will eat up?
<<< Additionally, SVGL is subject to the accrual of certain royalties based on operating income and payable to IBM under the terms of a research and development agreement. If SVGL is successful in increasing its operating income, the Company believes that such royalties will be significant.>>>*
4. See below also text from one of the filings I read. If the stock is so cheap and with all the cash they have, why aren't they buying back their own stock?
<<<In July 1996, the Board of Directors authorized the Company to institute a stock repurchase program whereby up to 5,000,000 shares of its Common Stock may be purchased in the open market from time to time. Through February 7, 1997, no Common Stock had been repurchased and the Company had not announced its intention to commence such repurchases.
Thanks for any insights, Eric. |
