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Technology Stocks : Trimble Navigation
TRMB 80.48+0.4%3:59 PM EST
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To: Jamse who wrote (2670)8/7/1998 2:37:00 PM
From: Yin Shih  Read Replies (1) of 3506
 
<<I must have missed the discussion about hidden assets and liabilities. Are you talking about the buildup of inventory? >>

This was in response to a query about a value/price model on another website wherein "fair" price for TRMB varied depending on earnings for the year. Hidden assets and liabilities were given as examples of why the model was overly simplistic. An example of a hidden asset, which the model is unable to recognize, is the "potential" earnings spent to build up R&D assets. On the other hand, until those R&D assets are converted to future earnings, no one knows what they are really worth.

<<Is this a good time to "double down" or could there be some bigger items we haven't heard about yet? >>

I wish I knew that :-) . My personal opinion is still that GPS is likely to be a growing industry from now through 2010. TRMB's ability to benefit from that growth is what is in question. If TRMB can continue to grow even at rates as low as 15% for the next five years, then $11-12 seems ridiculously low as that represents a market cap of only $250-270M, or 1X sales, for a company with potential revenues of $500M in just a few years. With 20-25% growth rates, then $1B is in sight not much later.

Aside from the business problems that they are having trouble managing, I would think TRMB management is flirting with disaster personally at these price levels as the risk of an unwanted tender offer is increasing. The offer would be for more than the lows, but not as much as I expect they (or I) think it should be worth.
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