Good description of TAVA's core business and post-Y2K market opportunity, but misses a few key points on how this might affect investors:
1. Many of the "bodies" being hired to do Y2K inventory and assessment work will be of little value after Y2K - they are on the low end of the skill curve, with little actual experience in implementing process control & info systems.
2. The rate structure (and margins) for normal process automation projects is SIGNIFICANTLY lower than Y2K and IT-oriented work, so there will be a very measurable reduction in operating margins upon transition back to "the real world". There are literally thousands of competitors in this space, and TAVA will not have any particular unique differentiator other than, perhaps, size and geographic coverage.
3. TAVA's shift to the planning/scheduling space is, at present, mostly just talk. There will be significant investment required to actually grow into this space.
I, too, see great opportunities for TAVA post Y2K, but I think it prudent to recognize that the business scenario is COMPLETELY different, bringing with it lower profit margins, higher cost of sales, and greater risk. |
