GM, re: "carefully" choosing words (and stocks)
From the audio field, Mackie Designs (NASD: MKIE) is
completely on top of their competition. Their
marketing is better, their products are better, their
customer base ranges from the highest echelons of the
music biz to the lowest common denominator garage band.
They consistently add the newest design innovations to
products in their field. Customer satisfaction is the
highest in the industry. Mackie's prices are low, with
revenues and profit high. Every year, they win 'tech
excellence' awards hands down. They are extremely
visible with rich, full-color ads in every important
magazine relative to their trade. Their debt is ZERO;
their return on equity 15%; book value is almost half
the stock price. This company is the picture of perfection.
Their stock sucks.
What has this company done wrong? Nothing. They consistently
beat the hell out of their competitors with such viscious
intent that one might imagine its illegality in at least
17 Southern states. So why does their stock suck?
80% of it is owned by the company executives who don't
trade. Thus, no movement -- no volume. If Iomega were as
good in their field as Mackie is in pro audio, the stock
price would be $100. Thus, one has to carefully investigate
the behind the scenes scenario -- sometimes superior products,
with superior marketing, at a superior price, with superior
customer satisfaction isn't enough for an investor. One quick
look at Mackie, and you would buy it in a second. 1.5 years later,
your value per share would be nowhere.
Jan 96, MKIE $10 -- Jul 97 $8.50
Carefully choose those who whip their competition.
-MrB |
