In the "Believe it or Not" category -- I am feeling quite a bit more comfortable with the company and stock now, and gradually increasing my position.
That is not to say that there are not risks but I believe that the odds are very high that the trend toward improving financial results will continue. I believe that with the 3 outside fabs they soon will be very well positioned on the manufacturing side. In fact, it was pointed out to me that Sanyo is already a sizeable customer so
that relationship is hardly between strangers.
Also as I have posted before, I like very much the allusion to IBM and LU on the recent conference call. I do not know precisely what it means, but I conclude that it suggests that a VERY important ingredient in the picture, product design capability, is doing at least OK.
In my opinion, if results improve at what I think is possible, or about $1 million plus per quarter, they will lose a few cents in the fourth quarter and will be trading at the end of the year just like they did a few years ago before they turned profitable -- at $2+. Book value would be materially lower than at that time but the company would be materially better positioned for lasting future success. I may be proven wrong, but I think that prices under $1 1/2 are living on borrowed time, ASSUMING THEY STAY ON TRACK.
I will feel even more cheerful if we see more insider buying reported for the month of April (and slightly less cheerful if we do not).
Some of us crazily think the stock could go up 5-10 times from here.
If insiders think the same way, there should be recurring bouts of insider buying to go along with what we have seen already. |
