Responding to your ignorant statement,"Let's face it, Radica could still be a one-hit wonder,"-- I think you are full of it and obviously misinformed.
Radica over the last year has sold 100,000 units or more of 20 different games and sold 7 of the top 10 best selling games in their category! Doesn't sound to me like they're a one-hit wonder. In addition, their category increased in sales overall by 31% while the traditional toy market decreased. This is a significant factor. It means that this handheld game category is still hot and getting hotter and when you consider the new pipeline of unique and exciting games coming out for 1999, all of the speculation on decreasing profit margins, increasing taxation, etc, etc, etc, is just a bunch of baloney!
Didn't anyone read between the lines on the conference call? I kept hearing one phrase that makes more sense than anything else to me, "all of this depends on the TOP LINE SALES." These guys know they've got a hot year ahead of them, they've got the Ultimate Bass Fishing Game coming, Deer Hunter coming, Star Wars coming, Girltech coming, the new Ultimate Speed Zone NASCAR coming, three price leader $9.95 games coming, and they signed up the largest toy distributors in 5 new COUNTRIES(not cities, but countries-- as in millions of potential new buyers.
1999 will be the year for RADICA, now that they have a 6 consecutive quarter of profitability history and a huge new pipeline of games, this company has proved itself. Now it's just a matter of time before this story becomes too compelling to ignore by wallstreet. Wait til everyone sees that once again Radica has had a complete sellout and sell through of every game they've manufactured this year by Christmas!
I know you're disappointed right now that the share price doesn't come close to reflecting the value of this company, but believe me it will. Small caps have been dead for a year, but soon the tide will turn and when the small cap market begins to heat up as it always does, Radica will be seen for what it really is. A cash cow and the ultimate undervalued growth play. Remember this post because it will prove to be prophetic. |
