More good press. Found this today on DBC website.
URL: dbc.com
Title: DBC NewsRoom: Clueless Investor
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Analysts see ThrustMaster thrusting to new heights
HILLSBORO, Ore. (DBC) -- ThrustMaster stock has been trading in range of less than one point over the past month, just under a new high. So what's its going to take for the joystick-maker to go thrusting into record territory?
Well, the answer may be a few months off -- Christmas. The fourth quarter is the single largest period for the company, and typically shapes the market performance for the future months. Consider the fourth quarter in 1995 and that of last year. Two years ago, the season was bleak. ThrustMaster missed numbers by 20 percent and the stock began a slide that took it to just over 3. Move ahead to last year, when ThrustMaster reported smashing profit and revenue levels. The company beat earnings estimates on sales of $15 million --
half the year's total and only a $4 million less than the entire year of 1995. Although the stock spiked on the news, it remained in single digits until summer, when it broke through to 13. That's double the offer price of ThrustMaster's December, 1995 IPO.
Black & Company analyst Shawn Willard said the stock has taken off this summer because ThrustMaster has done well in the so-called off quarters. "The company is always going to be tied to the fourth quarter, but if it can get stronger (sales) in other quarters, then so much the better," he said. He added the end of the year looks "strong" because of a new steering wheel for NASCAR racing games and mid-priced joysticks for flight simulators. Black & Co. projects the stock will hit 18 within a year.
Although it trades at about 21 times earnings, the 9-year-old company, which has made money for the past seven years, has a strong balance sheet: No long-term debt, $1.73 in cash per share and $8 of current assets for every $1 of current liabilities. "ThrustMaster has a very clean balance sheet and is conservatively managed," Willard said. "You'd be hard-pressed to find anybody who'd have an issue with the balance sheet."
However, one fact that might temper investor enthusiasm is that the bid/ask spread can be gaping, as the float on the stock is only about 4 million shares. Willard said he's made it "brutally obvious" to the company that it should increase the number of avaliable shares. He added ThrustMaster is mulling a stock split to increase the float.
And even if Christmas proves to be a red-ribboned time, Willard projects the fortunes will continue strong into the new year. He said the company will likely roll out new Universal Serial Bus-compatible products in 1998. (USB was developed last year by a group of peripheral and telephony equipment makers allowing PC users to plug in items more easily.) Willard said USB will allow
PC games to have "the same 'playablity' of Nintendo." Until now, the PC games industry -- to which ThrustMaster is tied -- has been slowed in development because of limitiations in multiple players. That may be changing with the USB and may well help ThrustMaster during next year.
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