Chris,
Looking for a turnaround in the 4th qtr for TSSW. Believe sales are picking up. Received the following company responses to questions on marketing and sales:
1) What are you doing about the marketing and distribution of your products?
" We have just launched the products and have seen significant shelving orders from the major retailers. Our advertising campaign begins February 7th for March issues of PC Computing, Computer Service and Repair, and Computer Technology Review. And for February we have end caps in retailers, including CompUSA. With our new aggessive sales and marketing campaign we are focusing our efforts on our top 80%. Which means we will not always be in every catalog. But the major catalogs we are in, currently these include MicroWarehouse, Multiple Zone, Parson's, Elektek, to name a few. "
2) I know that you recently hired a marketing person, but I do not see any fruits from his labor?
" The fruits have just begun showing impact. The ads are beginning to hit in February and the channel inventories have doubled since November and the momentum is very brisk. "
I am looking for an earnings surprise in the 4th qtr. Given the company's cost cutting plan implemented in the 3rd qtr and the launch of 3 new products, I am expecting a good qtr. Stock is cheap on a fundamental basis as it trades at 65% of cash and investments, has no bank debt and sales at a steep discount to the Industry Price to Sales and Price to Book. Given an industry P/E ratio of 46+, any move into the black would result in huge gains from this level.
DC |
