Geek,
Thanks for your well considered posts, some of the best.
I just found this thread, and have been digesting the good and the not so good. Regarding the post on Focus Enhancements, I agree that it does not fit the criteria--Ligand doesn't either--since it does not have earnings. But both FCSE and LGND do share something with the spirit of the criteria, that they may be poised for exceptional growth.
Let's not forget Iomega, which was a 100 bagger *only* if you count it from the time that it was *losing money* and trading at a split adjusted 9/16 or some ridiculous price, and a market cap around $50-60 million. Iomega was at the time getting cleaned by Syquest, and many believed that it had a shot at a $0 market cap. Then there was the Zip...
So if someone knows of a company for which they can make a well reasoned and credible case for explosive growth, then I would like to hear about it. I think Focus Enhancements (FCSE) fits the profile very well.
So now I'll put my mouth where my money is...
More on FCSE:
They have 49% of the market for PC to TV scan converters. Nearest competitors hold 20% and 10%. Market projected to grow 375% in next two years (trade mag projection, I think). Their aquisition in 96 of TView adds new strengths in engineering. They are now completing a chip for the PC-capable TV market and other uses. They are developing a "prosumer" digital video editing product, sort of an Avid for the rest of us.
96 sales of 15 million. $12 million in guaranteed revs from Oct. agreement with Zenith. (Essentially an extension of a $2 mil deal last year). This should add $8 million to sales in 97. A new agreement with Apple should add $2 mil. They are talking seriously with Compaq and others, in addition to many TV makers.
Apparently Zenith is very pleased, going from $2mil to $12 mil in commitments in one year. Others may follow this example soon.
How much have we heard about convergence of PC and TV?
Guess who pioneered the inexpensive, quality PC to NTSC composite video encoder in the first place? I remember when a cheap converter cost $500, most cost more. Then boom, there was this amazing one with quality *just* under the $1500 and up variety, like TrueVision Targa, at a price of $150-$200.
I heavily researched these products over the years, and nobody comes close in price performance. (Through mid-96--haven't researched recently, but will soon). They essentially created a niche market out of thin air.
TView, now owned by Focus E. has been the fastest growing company in Oregon over the past three years. OK from $0 to $3mil/year isn't a lot, but it speaks of innovation.
Finally, with all the set top boxes, will they require NTSC video out?
I am not talking about WebTV, but real products in the coming year or so. This could be a big market.
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Current market cap = 10mil shares x $2/share = $20mil
97 sales will be at least $21 mil, I expect surprises to $25mil with ease. 98 even better.
So trading at 1 x 97 sales or better!
Now how big is the PC-TV-Video convergence market going to be?
Dunno, total thin air guess, 30 million units sold by 99.
$40 per converter x 30mil = $1,200 million sales 97-99
Consumers *need* to buy something really new. The hunger is there.
You think I'm crazy, well someone had to spot the potential of the zip early on...just wish I bought the stock then, I would be filthy rich;)
Please tell me where I went wrong here. I can't sleep, I just keep going over it, with better scenarios each time.
This is a smart company.
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Do your own homework, I am not qualified to give investment advice... |
