Ill just take it easy and try to figure out who is who....
That is fine, especially if you will do the courtesy of allowing us to evaluate you. Consider, for example, the following and tell me if the points brought up therein concern you greatly, somewhat, or not at all:
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It is not unheard of for high-tech hyper-growth stocks to project massive losses as far as its analysts care to project.
However, these losses typically result from what can generally be called costs of expansion. In short, there is an implicit understanding that the company has the potential to be profitable in the short-term, but is deliberately foregoing short-term profitability in order to strive for greater things down the road.
There are indications, however, that SRCM's losses are not of this nature:
o R&D expenses only account for .06 of the .74 loss in Q4, and only .28 of the 5.21 loss for the year.
o In fact, the bulk of the expenses, and therefore the loss, is attributed to "selling, general and administrative expenses", in other words, managing the sale of already existing products.
o Furthermore, R&D expenses are actually lower in 1998 than 1997.
o Another remarkable item is the preferred stock dividends, which were nearly as great as the R&D expenditures in 1998, though to be fair those may have been obligatory payments to financers.
The above aspects are generally not considered typical of successful growth companies or those on the fast track to success. |
