What do you see their revenues at for '98 year?
Sequential quarterly sales have been 6.6, 8.0, 7.6, 9.2
If this growth is simply sustained then I'd say '98 sales
would be around $42m. If the new PHY devices are as
good as they seem and the GB gets adopted then they could
easily exceed this.
When do their TAX losses end?
Impossible to be precise. The company's cumulative losses
over the 1991-1994 period are >$25m. I haven't seen anything
defining what arrangement they may have with the IRS, but it
seems likely they'll have credits to cover two or three quite
profitable years.
Have they got that cash from ATMEL yet?
I don't recall. Does anyone else here know ?????
What would a normal rate of tax be?
I'm not sure if this varies from state to state, and I'm not
a US resident anyway, but I generally use 30%.....
Say they T/O 60 mil?
margin? 10% => 6 mil
Tax 30% leaves 4.2 mil
over 32 mil shares => 13 cents.
Say they T/O 50 mil, at 11% margin => $5.5m
and use tax credits to shield this => $5m
so, over 32mil shares => 16 cents
PE ? give 'em 30 => about 4 bucks.
Give 'em 30 => about $5 bucks.
One off tax gains don't last for ever?
Nope, but they're a valid way of holding on to profits,
and I'd much rather Seeq had the cash rather than the
IRS, and pumped it back into new product development.
What do you think?
I think it's a gamble with quite a bit of risk, but then
most small high-tech "recovery" stocks are.
Against them is the fact that there seems to be a lot
of pricing pressure in this sector at the moment, (look
at the demise of MLIN and the warnings of QUAL), that
there are probably too many companies chasing too few
BIG opportunities (though thousands of smaller ones)
and the fact that SEEQ is not (yet) one of the strongest
commercial players here. This makes it look tricky.
However, SEEQ have come well through a lot of hard times,
which has to be a testiment to their management strength.
They have some excellent new products - Gigabit & the recent
100MBIT PHY devices (possibly exceptional). These should
command good margins. They have invested in new management
strength in the sales and marketing areas - an area which
traditionally has not been a SEEQ strength. These are all
major plusses.
Does anyone know where they have their chips fabbed ? If
it's in the Far East, will the recent currency weaknesses
reduce COS ? This could be another plus.
If sales > $45m, then the sales/share will be >$1.50. For
a high-growth company, a PSR of >5 isn't unreasonable.
Another plus is that I believe that SEEQ are a regular
favourite of the California Tech stock (?) magazine. Also,
SEEQs analysts are (the analyst is ?) forecasting 30c for the
current year...... 30c might look optimistic at this point,
but if they hit it then that would almost certainly warrant
a high P/E ratio - maybe not as high as LEVL (>50), but I'd
settle for 30.
Overall, at $3 this currently seems to have small
downside risk (unlikely we'll see $2 again), and plenty of
upside......
Mark |
