MRV Communications (MRVC) opinions? Message Board

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Technology Stocks : MRV Communications (MRVC) opinions?

MRVC 9.975

-0.1%

Aug 15 5:00 PM EST

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To: peacelover who wrote (7389)	2/28/1998 11:42:00 AM
From: Larry J.	Read Replies (1) of 42804

peacelover, Who downgraded? First Call and Zacks still show (2) and (4) analysts with strong buys. (granted this info. is usually dated) Regardless, Gruntal's Vivik Rao on 2/24 stated "the problem is short term and called Tuesday's selloff an overreaction" He noted that the company has "a strong track record" and a reputation for managing growth well. Amar Senan of Volpe reiterated his strong buy (also on 2/24) and boosted his revenue projections for MRVC to $260 million from $251 million in 1998. I would not read anything into lvl 2 data from yesterday suggesting that Volpe is a net seller. Aside from the fact the inventory increase came as a surprise, I do not view this as a negative per se, as I'm certain that there was a forecast in place that drove planning and production to build up the inventory. The inventory is in place to fill customer orders. This is a good thing! Glazer (CFO) noted that the lead time was cut to make the company more competitive in the long run and that temporary inventory buildup was necessary to prepare for a shorter sales cycle. He predicted that inventory levels will "significantly" decline in the first quarter. Since the quarter is almost over this statement is solid. The inventory has probably already translated into revenue. I'd be curious if any component suppliers to MRVC are receiving any excessive requests for RMA's (returns), as that's the only other way to reduce levels without generating revenue. Remember, Glazer also said he believes the company will meet analysts' estimates for 1998. ($1.24 or 18.75 x earnings). Not bad value for a company growing at 40%. So we have had management confirmation (in comfort with the numbers). This may have been lost in the selloff. The only slight concern I have is in reference to an earlier post suggesting that there may be accounting irregularities. I'd like to see substantiation. Otherwise, IMHO MRVC will sort it self out here during the next quarter, and those investors buying / averaging down at these levels will be rewarded as such. Larry

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