RESEARCH ALERT - SyQuest a speculative buy
LOS ANGELES, Oct 10 (Reuter) - SyQuest Technology was upgraded to a speculative trading buy from neutral ''for risk-oriented investors seeking potentially
significant capital gains,'' said HD Brous & Co analyst Howard Rosencrans.
Expected introduction of 1.0 gigabyte SyJet,a scaled-down version of the company's acclaimed 1.5 gigabyte product, seen as critical to SyQuest turnaround, he said in October 3 Brous Report.
''Industry sources indicate SyQuest will soon announce the 1.0 gigabyte removable drive at a breakthrough opening price point of $199.95,'' he said.
''We believe that investors may begin to envision a very compelling turnaround starting to materialize at SyQuest'' tied to the product offerings, stabilized financial condition and new management team, he said. Investors could be enticed by analogies between SyQuest reemergence and the ''Iomega story -- a seemingly moribund company being revitalized by a proven management team possibly introducing a (potentially) hot product line''.
Rosencrans cautions that SYQT.O success or failure may be driven, at least near term, by the ''Iomega fantasy.'' The rival removable computer storage product firm to an estimated $1.8 billion company this year from $150 million three years ago on success of its Zip and Jaz lines.
''The harsh reality is that (SyQuest) faces a difficult uphill battle as Zip and Jaz have both established a very significant installed base, which may create a barrier to the acceptance of SyQuest's products,'' Rosencrans said. Reminds investors that SyQuest management has steadfastly declined to endorse speculation regarding possible product offerings.
SyQuest up more than 18 percent, gaining 97 cents at $5.25 a share in heavy Nasdaq trading mid-afternoon. |
