There is positive news about IMP.
NEW YORK (Dow Jones)--As Iomega Corp. (IOMG) goes, so goes IMP Inc. (IMPX)
At least that's how Wall Street analysts explained the continuing drop in the share price of IMP, a California computer-equipment company whose fortune has been closely tied with that of volatile Iomega.
''The trading in the stock in the last couple of months has been completely dominated by that relationship (with Iomega),'' said analyst Tad LaFountain, who follows both stocks for Kaufman Brothers L.P.
Shares of IMP, which derives about 12% of its revenue from equipment sales to disk-drive maker Iomega, were trading recently at 8 1/2, down 3/4, or 8.1%, on Nasdaq volume of 2.9 million shares, slightly average volume. The stock lost 8.6% yesterday, though it's still far from its 52-week low of 3 1/8.
Similarly, Iomega continued its plunge in value. It was recently down 20.8% to 21, a far cry from its peak of 83 last month.
The two companies became intertwined in the minds of many investors in April after television-commentator Dan Dorfman labeled IMP ''the son of Iomega,'' said Richard W. West, an analyst for Gaines Berland Inc.
That prompted IMP's rise to 23 1/2 in May, a price that made the stock ''seriously overvalued,'' West wrote in a research note.
It's therefore not surprising that the stock is dropping, West said.
LaFountain added that the decrease may simply be symptomatic of the recent malaise in high-tech stocks. ''The entire semiconductor sector looks just absolutely God-awful,'' he said.
Neither analyst felt that recent IMP insider selling, which involved almost 1.1 million of the company's 26.8 million oustanding shares, was to blame for this week's price drop. That selling, completed during three weeks in May, is ''an ongoing story,'' a company representative said.
The representative declined to comment further on the stock's recent activity.
West and LaFountain, though, remain bullish on the stock. Both have upped their ratings on the company to buy within the last two weeks.
''The company's doing very well,'' said West, who predicts earnings this year of 53 cents a share, compared with 20 cents last year. He expects the price of the stock to move into the mid-teens after Labor Day. |
