Stitch,
FWIW, I bought MTIC several times last year, believing both from what I read and from speaking with someone who worked at a large university that used a $2 million MTI system, and who believed it was at least as good for them as an EMC system would have been at half the cost, that MTI represented good value. However, I ended up selling it in Dec at a hefty loss, as I needed the loss to offset some gains I had taken earlier in the year. Must wait another week or so to buy back. I still think it represents value at these prices, although the last two reports have been subpar after a number of excellent reports, and there are some valid question about how their management is executing. Furthermore, they are up against one of the great companies in this country now, EMC. A number of months ago, when MTI was about 5 or 6 and EMC was abot 50, I somewhat pompously said on the MTI board something like I bet that MTI would be at 10 or 12 before EMC would be at 100. Wrong. EMC is now at 100, and MTI is still between 5 and 6. Clever me.
Ray Noorda is Chair of the company, and owns, both personally and through a subsidiary of his that I don't entirely understand, a majority of the stock in the company. He bought more last fall at around 8 (around 100,000 shares, as I recall). Noorda does not actually run the company, though, but I would expect his experience with Novell would be invaluable (though he certainly screwed the company up in the end, both with his purchase of Word Perfect and his failure to see either Cisco or the Internet rushing into his market).
The stock could easily double or more from here if they can move to the next level, revenue wise. That is, they are at an approximately $200m annual run rate now ($48-50m/Q), they need now to push that to $300. The opportunity is there, they are in some great markets, technology seems to be competitive, but their sales force doesn't seem up to the task, at least not yet. There seems to be a number of smaller companies like them (e.g., BXH, SOS to name a couple), but they haven't been able to get that killer sales instinct that EMC and other great companies somehow got. Still, it seems to me to be an interesting speculation that could pay off. However, a good deal of their actual growth in the past couple of years has come from selling DLT systems/libraries (they resell OVRL's library, I believe, although it might be another company's; in any case, it isn't their own). They need to focus on selling their own systems. They were also late by a couple of months in bringing out a FC system, though they finally got it back in Aug, I believe it was.
Good luck with it. Hope it treats you better than it did me. I would consider buying it back, especially if they can start growing their system revenues again. Of course, if they announce that, the stock will probably gap up to at least 8 or 9 the next day. |
