Mike,
NCDI has made a nice run of late. The stock has nearly doubled over the last couple of months (8 - 15). The company's main claim to fame right now is the IBM deal and they are reaping those rewards. They reported a solid, profitable quarter today as a result of the IBM deal but overall they are losing money for the year. In my opinion, without IBM the company wouldn't have anything substantiial. HDS scrapped every line they had and rolled the dice on the NC. The first quarter of fiscal 97', which ended 9/30/96, they did 3.5 million in revs. and 2cents a share in earnings. Thats impressive considering the bold step the company took. (Going for it all with the NC). They also shipped @ 1/2 million $ worth of Beta-test products; and they were still able to turn a profit. The main reason why the stock did not move is the huge short position in the stock. The first quarter was a success for the company, with a new product and all, but short sellers don't care about anything but numbers. All they care about is how you compare with the previous quarter. And HDS was down from same quarter ended 9/30/95; in which they did @ 5.5 mill. in revs and @ 6cents a share. Since the company announced the 2nd quarter, which was a record quarter, the stocks up about 30% (7 - 9 1/4). And the shorts hardly covered. The short position is still over 500,000 shares and only 10,000 less than last month. So this stock is up on natural buying. Imagine when they start to cover! As far as OEM's go they have done business with IBM before, with their previous line of computers, the X terminals, and I believe more OEM's are possible with some or all of the big co's. you mentioned. They already have deals signed with Hitachi and Motorola. They also received the first ever multi-million $ retail purchase order for a network computer system in the industry; from AARP.
I'm sorry if I just overwhelmed you with details but I really think this company is a diamond in the rough. They've got all the makings of a huge success story. I'm glad you own it and I personally would buy at these prices. I think they're a great takeover candidate too. I feel that NCDI got off to a faster start in the sprint, but in the marathon my money is on HDS.
Robert John |
