<<HTCH's 60 or 70 percent market share seems likely to increase and I have to wonder when their competition decides the business is unattractive given the increasing technology, innvestment, precision and proprietary technology which must be paid for.>>
OTOH, if the technology is so expensive to produce TSA, if it is by far the best approach to take, and since HTCH has such a commanding lead and market share...why are others still trying to compete? RDRT's adventure, INVX's Flex tech, Fujitsu,... Are they all in denial?
Don't get me wrong, I don't have a position in either INVX, HTCH, etc. The whole game scares me because someone is going to lose BIG. A while back HTCH was pretty good at reporting TSA's EPS drag, but they stopped being very specific recently. My current WAG is that they've cost themselves somewhere on the order of $100mil in BV during the transition so it better work out! Look back thru the EPS history and work it out how long it will take to make that back up... It's scary. This is a company that way underestimated the costs of transitioning to this technology. They are in it too deep to pull out now, but others don't have to follow the same path. This is the gamble when you buy HTCH for the long haul.
Last I heard TSA ACP was still >$2. Any idea what it is now? What will happen to HTCH if someone discovers a cheaper way of doing things? HTCH's D&A has increased by 1/3 in less than a year. What are the estimates going fwd? Don't underestimate the potential drag of expensive equipment.
Surely something is in the works. Can you see FC's new company using TSA components? A $50 DD just won't allow it.
Scared out of the biz by Gloom and Doom Larry,
todd |
