Emulex, What Prospects? Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Emulex, What Prospects?

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Greg Jung who wrote (120)	3/27/1998 8:35:00 PM
From: iceburg	Read Replies (1) of 788

Looks like a good strategy, out-sourcing. I agree completely. It is very expensive to run a manufacturing plant in the long run if you don't have a steady, relatively predictable thing to produce. It is very expensive to be upgrading your facility. The bottom line is that Emulex was too small do it's own manufacturing. When orders are strong you don't have enough manufacturing capability and when they weaken you have a ton of overhead and extra people. This move should free them up to concentrate on engineering and sales. I think given their contracts and the fact that FC is clearly going to ramp for real this time that they should have a higher market cap than 70M. They had revenues of 15M last quarter and a profit of $0.15 Some $5M in FC revenue. Seems to me after the move their expenses will be greatly reduced (their margins will be lower but I'm sure they did the math and figured it was for the best) Oh well, I didn't buy enough to damage me if it doesn't work out. I plan on giving them 6 months or so to turn it around. I'll double down at 7 1/2 should it get there. Steve

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next