INVX Innovex Comdex Winner !! Message Board

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Technology Stocks : INVX Innovex Comdex Winner !!

INVX 25.35

+5.2%

Feb 6 9:30 AM EST

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To: Mark Oliver who wrote (1812)	12/5/1997 8:50:00 AM
From: mfamily	Read Replies (2) of 3029

CONTINUATION PAGE TWO Furthermore consider the expansion that Innovex which went through: "We are currently shipping pre-production volumes of HIFs ahead of schedule and it appears that our customers are on schedule with their production ramps. We expect shipments to increase dramatically during the second half of fiscal 1998 and we need to have the capacity to produce a minimum of 2 million HIFs per week by January 1, 1998, 5 million per week by July 1, 1998 and 10 million per week by January 1, 1999," said Haley. This is from April release last year, but imagine going from 2 million per week to 10 million per week. What is a reasonble PE? I don't know, but putting rules of thumb aside consider if the long bond is 6% would you be happy with say an equity return of 6% (which provides additional tax benefits because it is deferred until sold and also subject to lower tax rate)? That equates to a pe of 16.6 and a price of 46.6. The key issue here is future growth beyond the coming fiscal year. I propose that the question of growth beyond one year is the missing element and the reason the stock is not higher right now. I believe for the most part that growth will continue for a couple of years because most dd makers have committed to MR technology for better or worse. A company like Western Digital has taken write offs of 100 million in the transition to MR. I just find it unlikely that they could switch in a short period to any other technology and take another write-off of that dimension. Finally, as I mentioned previously, Innovex has some cash that it is apparently going to use to buy something. If it is done wisely it will only improve the situation. Two quarters of great earnings are going to turn the stock price around, so by April 20 look for the stock to be around 40. Now, for anyone who thinks I know what I am talking about let me tell you that I have been a buyer of Datum as it dropped from 40 to 28 to 20 to 18 (when i really started buying) because their decrease in sales was supposedly only an inventory adjustment, only to get killed this week when they announced other problems and the stock dropped to 14+. Buyer beware.

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