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Non-Tech : Any info about Iomega (IOM)?
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To: Herb Fuller who wrote (52845)4/20/1998 11:38:00 AM
From: Jock Hutchinson  Read Replies (1) of 58324
 
Actually Herb. We are both wrong. The historical ratio for a disk drive maker in terms of price to sales varies from 1:1 to 1:3 not 1.5:1 as I suggested in a previous post and which you followed up on. For example, in the past four years, Seagate and Western Digital with superior storage technology have sold at price to sales ratios in the range of 1:3 to 1.5:1 for Seagate, and 1:4 to 1:1 for Western Digital.
I would note that during this time, both drive makers experienced an average of twenty percent year over year growth in revenue, which is superior to the year over year growth that IOM just posted. Moreover, neither of these two companies ever had a year where they suffered the sort of cash flow decline that IOM experienced in just one quarter. Recently with tough times, the ratios are much closer to the lower end of the scale. Thus, by these standards IOM is an awful investment. Again, Herb I apologize for flipping the sales and price ratio in my previous post.
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