Comparison Between IOM and SYQT - JMO
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SYQT as a stock somehow is attracting more attention than IOM. The Street tends to hate IOM, maybe because of the burn people suffered during 1995 when everyone bot IOM from $10 to $50, only to see their money disappeared when IOM plummeted back to teens couple months later. Since then, IOM has been a gray rabbit on the Street and no big boy cares to catch it, even though Iomega's sales has doubled and doubled again during the period.
On the other hand, SyQuest as a company has constantly disappointed its stockholders during the same period. Its sales has "grown" with the similar rate as Iomega's, only in the different direction, i.e. shrinking 30% yearly, yet the number of its stock has doubled and then doubled again in the last two years. But, its stock seems always attracting new blood, and so still floating around.
Obviously, the above phenomenon looks very interesting. It's a classic love/hate story on the Street.
Here is my take for the future of both stocks,
For IOM, it has to consistently grow its sales and EPS with the double digit growth rate. It probably takes at least two upside earning surprises to force the Street to accept it again. If, and this is very possible, that IOM's growth rate shrinks in the near future, its stock will be hammered again and again! At this time, too many people are worried about IOM losing market share, therefore any smallest sign will cause panic sellings. I have to say that at this time, IOM is a fairly risky stock to own.
For SYQT, people seemed used to accepting bad earning news from the company. They tend to forgive the company as long as they can find any hope from its news report. On the other hand, since the stock price is low, there is always a small investor willing to take risk, buy into it and hope to make a quick profit. In this sense, SYQT has some significant upside move possibility. Any tiny good news will move the stock. Here is a list of possible good news, any single one of them can move the stock,
1) sales grow 30% to 40mil in March qtr.
2) loss reduce to 20mil, or 30 cents
3) SparQ's sales/backlog triples in March qtr.
4) one OEM win
5) an alliance with anybody
6) major investment from any investor
7) an endorsement from anyone
8) a financial arrangement with a bank
9) buy out or partial equity investment by another company.
10) a rumor of any of above
11) even a hope of any of above
So you have it. The conclusion is, own at least some SYQT if you can. The chances are you will make money in next three month if you set a reasonable target (being 100% gain or less). On the other hand, avoid IOM for now until it beats the Street at least two more times.
Good luck!
MB |
