Jack-
I did a little research on MYLX. It is very cheap, assuming the company lives up to expectations about growth and EPS. Two things concerned me about it. First of all, even though the stock is cheap, and recent news looks good, I wouldn't recommend buying until the chart looks more positive. Also, I looked at the balance sheet and earnings report for the 3rd Q. pcquote.newsalert.com
Compared with last year, the company's inventories have grown, the receivables as a percentage of sales have dropped (indicating that they may not be getting paid for sales), and the cash and short-term investments have dropped substantially. The latter point may be hidden by the growth in current assets, but upon further inspection, one sees that the growth in inventories accounts for the increase in current assets. These things may mean the company might need to offer more stock or borrow money to maintain cash levels.
It may also be true that the apparent upturn in the data storage industry will carry MYLX with it. However, although I did not perform extensive research, I believe that until 4th Q results are announced, you should watch the stock, not buy it.
Just my .02 worth.
-Todd |
