My thoughts
by: akbubbavan 7/18/00 1:58 am
Msg: 6612 of 6624
Hi wojollymon:
Yes I am a CPA, and a CFP and CVA. Most of my experience is with smaller companies in my professional practice, and you are probably much more savvy in "the market" than I. Until recently I have been a mutual fund guy, but decided to educate myself and focus on a few quality small cap stocks that could multiply ten to twenty times in value in the next three or four years. In my opinion, VARI-L is one of those companies. I could be all wet, but I don't think so - based on my study of the market VARI-L deals in, both internationally and in the US, and the huge growth being experienced by their best customers.
Re: the cash issue,(potential overstatement), I was referring to the post #6513 and #6509 on this board. This IRIS person seems to be somewhat of a flake. I was surprised to hear that he/she felt cash was being overstated on the company financials. That is pretty difficult to get away with, unless the auditor is asleep, and internal controls are very weak in the finance department.
Re: my comment on the potential inventory overstatement, I may have misspoken. I looked over the last three years financials recently and noticed that inventory seemed somewhat high on a comparative basis at 12/31/99. Then again, I believe management may have been stockpiling finished goods and beefing up work in progress to meet estimated demand in Y2K. You are probably right that it was IS0 9001 costs in question, and I have not had time to go back and look over the press releases.
Re: the KPMG study, I believe investors will only benefit. A company like VARI-L, being as small as it is, is battling a perception of being so small and so risky that it is someshat ignored and/or taken lightly in the market. I wouldn't go as far as to say the market believes VARI-L is one of the Beverly Hillbilly's, but you get the idea. Using a local auditor with only one or two other SEC clients shows that VARI-L is operating like a small company that needs to step up to the plate and spend the money to get more credible financial consultants. No harm intented to H & S, but KPMG has more credibility. Taking the step to hire a Big 5 firm is huge. Now, even if the findings of KPMG are negative, the market will see that KPMG has provided management with insight and guidance on the financial end, and the perception will probably be that they are now headed in the right direction (post-study).
My concern at this time is Mr. Sherman. I don't know a lot about his background, but what I hear is generally not positive. Does anyone have any unbiased and useful information on how he is fit/unfit for the role he has with VARI-L. Is he the guy to take the company to $100 million a year in sales?
Have a good one.
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