jerald, David,
jerald I agree with some of your analysis on the lower PE level but still feel that it is abnormally low, even for Radica. For Radica to be trading at it's 50 d MA is not the norm. Considering that most of what you mentioned is not new to Radicas situation and has not impacted the stock over the past year, I tend to think the point on the Asian market and perhaps a larger rest due to a steady one year run are the larger reasons. A strong Q1 should calm concerns over Radica being effected by the Asian contagion and I doubt very much that we won't see a pre earnings run if not a sooner move, (as Gary also pointed out). I don't think Radica is looking to go to a trailing PE of 7 to 9 on Q1 so as you and many others know patience is a virtue.
As far as supply, and perhaps David can elaborate on this point of view, It would seem that if their crew size is still close to what it was at cc, they must have built a lot of product from the last 3 weeks leading up to Christmas to now. It is my understanding that it takes a few weeks or longer for the product to reach the shelfs but if it was ordered direct then the money is in the bank and the flow of stock must be comming. The other cases are that Radica is building inventory in a large way ( I doubt after 1995) or the workers are not working, Given that the size of work week may have tapered down from pre Christmas levels, the crew size still says a lot and is about 150% larger then it was last Q1. The product is going somewhere and is being paid for.
David, can you tell us what current work force size is and/or unit capacity per week. If I recall correctly at the time of conferance call it was 300,000 units per week. As long as I'm picking your brain could we find what the average unit/week levels were in Q1 1997 as well. I get the impression that units per man hour may have also increased over the past year or are they about the same. I realize the current level of units may not be info you release for competative reasons but thanks for your help on any iformation that is not a over the line.
Best wishes to all,
Wayne |
