I call them ocassionally and I like the way they answer my questions. I think the disk drive industry has a lot of competition, but Innovex holds an interesting position of supplying 98% of the market. Regardless who actually sells the drive to the customer, Innovex is paid.
I think it is sure that more drives will be sold. As new drives are sold, they have more heads, which mean more wiring per drive sold. They do drives for all types of systems; laptops, zip drives, desk tops, servers, and high end drives.
They are good at what they do and their margins are high. They seem set with new products to adapt to changes. The recent aquisition of Litchfield has put them onto new technology which will carry them into the future. Last time I checked, they had a big cash position and no debt. Their earnings record is great.
They've been developing software which has application to the Intranet and Internet. These systems have been very well received and they have gotten Best of COMDEX awards several times. I think the value of this division isn't factored into the share price. I wouldn't be surprised if it was worth a minimum of 25 million dollars.
According to Bill Murnane, they have been sowing seeds giving trial copies of their systems and there has been very good response. These trials are about to expire and we will see the result in the next 2 quarters.
Now, as you may have noticed, I started this thread when the stock was selling around 13.5. It has since gone, I think, to 24, and fell with the rest of the tech stocks in June/ July. Will their be a ralley?
I'm happy holding my shares. I think it will pay out well over the next year. I wouldn't buy it for day trading although they can move nicely when the volume gets going.
Mark |
