Rex's current outlook:
Now we finally get the upgrades... in the $20s.
I agree with you Jay, this thing should get a higher multiple. The biggest reason being price stability which does wonders to the bottom line. The instability, or flat-out price erosion, is what killed us in 1998. But its looking like 1999 will be the other way around.
The financial model really likes price stability. The leverage to the bottom line is huge. With stable prices, the unit volume growth maps directly to the top line. Remember, Jerome and I had estimated correctly over 100% unit volume growth, which I still believe going forward.
In short, earnings leverage is huge, thus allowing SNDK to kill estimates in a few quarters if prices remain stable and competitors focus on DRAMs. Add to that the growing popularity of Digital Cameras, mp3 audio, and Win CE machines, and this stock can return to the cult category.
Jay and Ed, I am very happy to have you back.
jkb, I didn't know it was you until now. I wish Jerome could have stayed with it. But it was indeed a drastic price dive that only those who have lived through these things before had a good chance of surviving.
Aus, thanks for picking up where Jerome left off.
Cheers,
Rex
$23 5/8 |
