"Are their finances in acceptable shape?"
No. They have done a series of floorless convertibles, have negative cash flow from earnings, declining revenues, and the balance sheet is a general mess.
"Have they been mentioned as possible buy-out candidates by the highly respected Forester group?"
Sure, months ago. By now, we can conclude that the possibility is non existent.
"Do large companies continue to do business with them a year after the Barrons assault?"
Less and less every quarter.
"What is the market potential for their new products?"
It depends to whom you listen. If you listen to the balance sheet, not much. If you listen to the pie in the sky promises of the company, the sky's the limit.
"Are they in a growing and exciting industry?"
Always. Osicom never grows, but they keep moving from one growing and exciting industry to the next.
"If there is a long acceptance cycle before candidates who are testing their products will award sales contracts, has the company been up front about this?"
It seems other companies are selling products into the market, while Osicom has "evaluators". This despite Osicom's "head start".
"Are they able to obtain credit from reputable financial markets?
No. This is witnessed by the fact that they continue to do floorless convertible financing schemes. The last one was in May '98.
"Is there a lot of interest in the industry for their new products?"
It sure doesn't seem like it. Where are the sales?
"If sales of old products have declined while waiting for new products to take up the slack, has the loss been gradual and within expected range?"
Hmm, so as long as they tell you revenues are going to decline it's ok, just so long as they promise to delivery of new sales "just around the corner"?
" Has the CEO bought stock in the company?"
Par Chadha has been a net seller of Osicom stock over the last year.
"What's my tolerance for stomach churning swings?"
What stomach churning swings? Osicom has been headed steadily downward for the last 2 years.
"If I'm accepting a risk, what is my potential reward?
If the reward is years down the road, what's the future value of today's investment?"
I suppose these questions are designed to get people to infer that Osicom has the potential of a high return. You have to be kidding.
"Would I do as well to put my money in a Mutual Fund?"
With Osicom, you would do better. You do realize that you would have had to have bought Osicom in late 1994/early 1995 to even have a profit? Even then, you would have had to have timed it right, as Osicom traded as high as 7 1/2 in November of 1994. Let's find a mutual fund that is down 40% in that same time frame. (7 1/2 to 4 1/2= 40% loss). Even had you bought at the 1994 low of 3, you would still have underperformed the S&P 500.
"Did Warren Buffet really start this way and hold through thick and thin?"
WB would never buy a company like Osicom. He wants companies that generate free cash flow and that generate shareholder value. To put "Osicom is a buy" in the same sentence as WB is a joke.
"Oh, yeah, and what's the chart look like - Not!."
The chart reflects Osicom's situation. It also reflects the fact that nobody is buying. When you couple that with a review of Osicom's history, it becomes obvious to anyone who isn't wearing rose colored glasses that Osicom is a lousy investment from the long side.
Barb
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