Perceptron (PRCP) Message Board

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Technology Stocks : Perceptron (PRCP)

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To: Tuan Phan who wrote (3)	8/20/1997 8:52:00 PM
From: Banjoman	of 34

I've owned this company for about 18 months now. I took a 1/2 position in it in June 96 after meeting the new CEO (Pease) and being impressed by him and with the company (at $32/share). To date, most sales have been to automotive industry (70% in 96). One of the current direction of the company is to diversify their customer base - through acquisition, and through developing industrial 3-D vision applications in other industries. They have substantial opportunities still remaining in auto industry (penetration rate is 20-25%), and Perceptron reports that they have limited competition in their particular market niches. If competition stays limited (so that margins can be maintained) and if the company is successful in its acquisition and new development in other industries (forest products, primarily), they should continue to grow in excess of 20% top line for at least the next several years. When I bought the stock, I thought it was fully valued at 25x 96 estimates. The company has come through with stellar sales and earnings in the first half, and the current cheaper price is only 17x 97 estimates (which may be revised upwards after the earnings report). I was impressed with management. The only red flag I saw in the quarterly report was that new order bookings were down slightly year-over-year. They disappointed in the first quarter though due to sales that they said were not closed in 1st quarter and would show up in second quarter - and that turned out to be true (which is why 2nd quarter was up 60% y/y, while 1st half was only up 34%. I just noticed the earnings report and how cheap the stock price was today. I'll check with the analyst and the company and see if I can find some explanation - perhaps the order bookings betrays a problem on the horizon. Don

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