Bruce,
If you are right about deferred orders hurting this quarter's results, that implies that next quarter will be great. Another good reason to scoop up shares at this level.
Avid is really the only game in town in NLE. There are competitors, of course, but they are weak and getting weaker relative to Avid. The very high end (Discreet, Quantel) is not an area Avid has targetted in the past, but with the addition of SoftImage they can now make a serious run at the high-end, effects-intensive market. Also, their recently announced Symphony product has 2 uncompressed r/t video and 1 graphics channel, with downstream keying. And Avid Media Composer projects can be total-conformed (i.e. 100% seamlessly imported) into Symphony. That means that MC editors can do joint work with Symphony editors. That is a huge advantage for Symphony. This product is higher-end than anything Avid have done in the past, and impinges on Discreet/Quantel's turf too. So Avid is effectively entering new and lucrative markets, if you analyze their recent announcements.
Maybe they will have some teething troubles integrating SoftImage, as some on the Yahoo Avid thread have said. Maybe they will have a bad quarter of deferred orders as they prepare to launch the Symphony product line. But these are temporary issues that will rapidly disappear.
This company generates a lot of cash, consistently beats earnings, consistently improves margins, maintains a leadership position in NLE products, has THE brand name in NLE, is branching into new markets in a business it knows well, and seems to be well run since their new CEO took over a couple of years back. So what's not to like ? That's why I think the current stock price is crazy. (And that's why I ditched my CPQ shares to buy Avid today).
AF |
