g'day all - dear Paul, I think Javelin has somewhat touched on this point: b/c of the [business] margin squeeze and just-in-time [jit] model adopted by most cos, backend loading is a fact of life. Not only do purchasing agents want the best possible price [as Javelin has said] but also they do not want to saddle with excess inventories. I suppose it [backend loading] can be used as an criticism; however, the problem with networkers is that they do not have as much of a flexibility to deal with the problem like the box makers [as the latter can swiftly shift into the built-to-order [bto] model like that of DELL.] But I ve digressed <g>. I think it is more important to look at the DSO #, channel inventories if possible, conversion rate [from other networkers] etc.
Anyway, back to your wonderment. I suspect that the expectation level regarding BAY's performance has receded somewhat. So, if BAY can come in around $600MM revenue with a decent margin [no marked deterioriation,] BAY will hang in the trading range. However, judging from the sentiment [as reflected in the stock,] I doubt WS will cut BAY any slack if she falters again. I mean, BAY has turned around for 3 Qs, then she stumbled for one Q - and she was punished. My conclusion is that BAY is no HWP or MOT. The latter has failed to achieved its target for a couple of years, but they were quickly forgiven. However, the former has made one Q misstep - and off with her head! Judging from this, I'd extend my doubt to the upside. Even if BAY makes a good comeback, she will not be rewarded too much immediately. However, that should add to her win-loss ratio.
best, Bosco |
