Why I think Corel will do well...
Not that Vanni is an expert or really knows what he's talking about, but by covering his short position he is really saying that he isn't so sure about the continuation of Corel's slide. I agree with him, I think Corel is done it's slide and have over the course of the past month taken a long position in the stock. Let me give everyone some simple reasoning as to why I think Corel will do well in the future. Please forgive me if you already know all this.
* Everyone hates the stock, it probably has a high short interest and a little good news can move this stock a long way.
* There is no other viable competition to Microsoft and Corel's products are at least as good, if not superior AND cheaper than Microsoft's. While Microsoft Office has become a de facto standard, Corel's suite is the popular alternative.
* They issued a gloomy, conservative forecast for the next quarter and a vague one for 98. This removes the uncertainity, something markets HATE.
* The Java strategy is a good one, people who are against it are merely whining because of it's short-term impact on stock price. Yes, it is effecting earnings but if there is one thing everyone should know about technology is that those who are first out the gate with new technology get disproportionately large marketshare (ever hear of a company called Microsoft?). Java is the future, it is not hype and Corel is well positioned to take advantage of it.
* Corel has sufficent financial resources and are focusing. They forecasted a $15-$20 (US$) loss for the next quarter, after that recent sale of peripheral software products they have somewhere in the neighborhood of $27 million in cash.
* It's a Canadian pride thing, I'm sure my neighbors to the north want to show up us Americans. OK, so I'm not ENTIRELY serious about that one, but there has to be some truth in it. :)
In sum, I'm cautiously optimistic about Corel's future and if you give this company a second chance, I'm sure you will be a happy shareholder in 12 months.
I would greatly appreciate a critique of my logic, thanks. |
