Can you substantiate your posts on SEG, WDC price to sales ratios? I think that there was a spike up above 2.5 psr based upon trailing revenues last year. But I might be wrong. I don't have a historical price database so I don't have any idea. I'd like to know because the DDX sector is SO depressed.
IOM as part of the DDX sector lagged the general decline by 2-3 months. I think it should trade in tandem with the others in the sector. The last high flier is EMC.
I am still waiting for one more plunge, but I might be too late on IOM.
Re, your questioning of revenue projections vs earnings projections. I think it has to do with the extra raw materials ordered in the beginning of Jan. I am guessing it has to do with extra zip plus drives. s. bateh's posts suggest that it is selling way slower than other zip drives, especially atapi drives.
If they bought enough material for 1 million zip plus drives (wild A** guess - WAG), then it'll take them 2 quarters at least to work off that inventory.
As for Orb/Castlewood, the difficulty of jaz/jaz2 to break beyond 2 million sales, suggests that the market demand is still in the 100mb market. Therefore, the tie ratios are going to be VERY low for the Orb. If I were a venture capitalist, I might be excited at 150mm in 1st year sales, but I'd look closer at the profit return in the long term. I bet they will be happy with tie ratios of 3:1 (disk to drive). But that is only $90:$199 in terms of sales.
As for Sony HiFD, IOM's economy of scale should allow predatory pricing practice (er, competitive pricing), of $59 ATAPI and $99 zip plus. Yes this will squeeze margin, but more important, it will make it REALLY unprofitable for Sony to pursue this market with gusto.
So,
1) profit projections for breakeven/slight loss are easier to make because they have to work off higher cost raw material inventory.
2) Orb does not have the tie ratio requirement for long term cash flow gains. (short term spike only)
3) Sony HiFD will compress IOM margins in July qtr (remember breakeven projection/slight loss guess for Q3?)
4) IOM Management is REALLY looking forward rationally now.
5) I wish the stock would dump to $6 so I can buy some really cheap shares. my last hope is this prediction of a "correction" coming. But what if it doesn't come until August? gack!
BL |
