Kudos, Wayne. The question is not if, but when. In evaluating the extremely (to me so highly margined) disappointing blip up to 11 after Maxtor deal on 12/23 and now subsequent decline to bargain basement 7's, I've had to look long and hard at what in the world the market is up to. A few things stand out to me after all the voluminous readings I try to take on the markets and herds pulse:
Big cap is in- but enthusiasm is slowing down
Small cap is out- but isn't about to be in any time soon it seems
Story stocks are out- few fliers are being taken for a ride(KM is perceived as story right now by most everyone)
Earnings momentum is out
Tech stocks are going out, however temporarily- witness 3com, Cascade, Iomega, Cisco, IBM, even Intel a bit recently
AXC was rumored and ran up last April and May on rumors of KM by fall, now here it is Feb and only one has bit, Big Money is going to wait and see at least one more deal, maybe several, maybe even wait for earnings surprises (oh no!, that'd be mid 98!) before chomping at the bit. Disappointment and impatience has had its way with this one- witness the TA poster saying Institutional Holdings are down from 16% from month ago to 8% this week. Don't know how accurate those levels are (just how accurate are they TA guys?? BTW, keep posting what the charts say please!)but the price action sure seems to verify it from where I'm sitting.
Where does it seem to leave us? Waiting for more KM announcements with a market that's uninterested, maybe for some time. Great company, great future, lousy stock market appetites this time for the story, the potential, the eps projections.
Just to comment a bit on the excellent Barrons article this week on Al Frank, Prudent Speculator- His methodology is to look at CORPORATIONS(ala Warren Buffect), not stocks or even the stock market, that are currently at depressed prices, load up on margin and wait till they get to Fair Value. He leads newsletter rankings for several multi year categories. Seems like he was describing what AXC is at this price and time- awesome corporation future, terrible price.
Incidentally, was reviewing my growing 2 inch thick AXC pile of info, and came across to exciting statistics with bearing on DST:
Prediction of 55% annual growth from 94-2000 in demand for data tape libraries, from 6454 units in 94 to 90,050 units in 2000, in an article that extols Ampex's DST-310 tape drive in comparison to IBM's Magstar, Exabytes' Mammoth, Quantum, Sony and Storagetek. Gus led us to it at tek.com
Also, WSJ article some months old entitled "Storage Devices Take Spotlight in Computer Industry- with focus on Data access, Growth likely to outstrip PCs and Servers"
estimates of Petabytes(Quadrillion- how much is that) of bytes shipped is estimated to grow from maybe 200P in 97 to 2800P in 2000, an average of 98%/yr growth, and for the Value of the market to grow from $44.6B/95 to $87.1/B in 2000. Seems to me DST ain't seen nuttin yet in terms of growth. Lately they've been running about $65M in sales for DST and DCR/DIS sales. That could double triple, quadruple maybe since they're in a hugely expanding market and expanding out to other sectors this year. Seems this is the year DST could take off and finally give some revenue growth- PA Merchant is forecasting sales to grow to $125M I think, and I'm sure most of that is from forecasted DST sales. By 2Q report, when new _12 line of DST is fully available, this baby should finally turn in some good year over year Q comparisons of revenue and eps.
Suffering long with an unjustly dumped stock |
