One Individual's Analysis of Tava.
After researching Tava for the last six weeks, I am frankly stunned at the potential for growth this company has. With your indulgence, I am going to lay out my best bullish and best bearish cases and ask for comments.
Best Bullish Cases I Could Come Up With -
* If only one percent (and I believe it is a higher percentage than that) of the embedded systems worldwide are Y2K "defective", that still leaves the world with several hundred million defective items. Regardless of the actual "defective rate," several billion embedded systems will need to be tested.
* Tava has the largest "unique item" database I can find dealing with this problem. Heck, it has the only significant one I can find.
* It has struck me that when a manufacturer chooses a Y2K vendor, it is literally betting its entire future on the reliability of that Y2K vendor to help it resolve its problem. The fact Unilever, Kraft, Coca-Cola, & GM among others trust Tava that much speaks volumes to me.
* PlantY2KOne appears to me to have at least a six month head start on any other competitor. It seems to me, in terms of Y2K time, that is an eternity.
Best Bearish Case I could come up with -
* I have read where many of the Y2K embedded systems "experts" feel the exact same item produced by the exact same manufacturer can still have different results in terms of "defectiveness" depending on how the product is being used in the real world. The argument seems to be that in reality you have to test ever single embedded system to be truly Y2K "ready".
If this is true, the idea of PlantY2KOne will not work according to my understanding of the product. My understanding is the methodology behind the product is something along the lines of "well this particular "unique item" worked properly in another companies factory we tested so let's not waste our time retesting this particular item at your location."
My Personal Conclusion -
Even if the PlantY2KOne product isn't 100% perfect, it will still be heavily relied on because no one has enough time to test every single embedded system in every single factory (even if the manpower existed for such extensive testing - which I don't think it does).
As far as I can tell, Tava is the "800 pound gorilla" in an industry that is sure to have explosive revenue over the next 2 or 3 years. Even if you place a $250 million market cap on Tava, that still seems cheap to me.
Anyone care to comment?
Chris |
