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Non-Tech : Gentex (GNTX)
GNTX 23.77+3.3%3:59 PM EST
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To: Bill Marble who wrote (93)2/2/1998 12:48:00 AM
From: Turs  Read Replies (1) of 196
 
Hey GNTX fans! I've been posting on Motley Fool for about 2 years and only became a member of SI recently. I have owned this company since mid '95 at $9.25/share. Have averaged up, but my avg. cost is still just $12.50.

A few answers to your questions.
1. A "lifetime" contract (just awarded from GM) means that any models covered under that contract are not available to other potential suppliers for bid. In other words, Donnelly is shut out from those models for the entire 5 years. I suppose 5 years may be the average lifetime for a model - hence the name.
2. Estimates are already going up. Consensus is somewhere around $1.25 now for '98.
3. The Autolink mirror will cost around $750 in the beginning. Don't look for this to be a driver of revenues for GNTX for at least 2 years. But you should take it as an indication of how exciting the company's potential future is. The mirror could essentially become the brains of the networked car, a communications device on wheels.

The gross margin for the fourth quarter was a surprise to me, but with it moving up from 36% last year to 38% this year, it is likely that $1.25 will be too low. I know the stock has run and you will probably get a chance to buy it below $30 again. But don't even think about selling it. Despite good coverage, it is still fairly unknown to large institutional investors. This last quarter is probably waking some of them up and it looks like the momentum investors are just hopping on.
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