The earnings mix probably turned off some investors. Product sales
were not that impressive and quite a bit of revs came from service
work. Although the dilution, charges and product cycle slowdown were
out there and well known prior it seems that more was expected, especially from Answersoft than was achieved this Q. Also, in this
market, if you're a small cap, you have to beat est. by quite a bit
just to stay even. I think DAVX will get back to 20 and set there for
awhile. Nothing fundamentally wrong with the co. but the boss seems
to have lost his edge in the financial side; he's primarily a salesman
and cost cutter. He may have been snookered in the Answersoft deal.
I still think DAVX performance will accellerate, slowly, then strongly
within 6-12 mos. The basic strategy seems intact, thus there is cause
for optimism in face of today's action. I noticed that First Albany,
on cue downgraded to buy. This is not unusual but keep an eye out for
possible estimate revisions. I don't expect any downward nos, but as
always, no guarantees from the mgmt IMO. |
