Hi Ed, yes, the very reasons why IISLF idles at its current price..."beaten down, forgotten about"... recent momentum play is complete, volume dry yes, as price stabilizes in the 4's, a positive as it is now at support levels.
I place value into its niche and will continue to remain bullish on san's until the market suggests otherwise. Maybe IISLF is on the verge of turning things around, maybe not. risk/reward ratio works for me at the price of 4.
And no can do on giving you further reasons why to buy. Rather, gotta rely on the company to deliver the goods and soon enough we will know.
Maybe a turnaround story in the making, who knows, time will tell, so let's see what happens.
IIS could be ready for recovery
New investment, hot market could spur revival
By Eliav Alalof, CBS MarketWatch
Last Update: 11:58 AM ET Dec 21, 1999
Silicon Stocks
HAIFA, Israel (CBS.MW) -- IIS Intelligent Information Systems, an
Israeli storage network company whose shares collapsed in the
mid-1990s, may soon see a revival as demand for more storage space
boosts the fortunes of the networking computer group.
An expected six-fold growth in storage capacity in the next three years
and a tripling of storage connections has shares of many companies in this
group rising. But IIS has until recently sat out the party as it struggled to
recover from several wasted years pursuing a mainframe technology
instead of a software one.
IIS is banking on its year-old offspring, StoreAge
Networking Technologies, to write its success
story. Recently, IIS and StoreAge got a vote of
confidence from Ophir Holdings and Israeli venture
capital firm Genesis, which invested $1.6 million
each.
"IIS has an excellent solution for large organizations
with massive loads of storage," said Eddie Shalev,
managing partner at Genesis Partners. "I think that
(IIS spinoff) StoreAge is positioned to be a leader
in this area and is one of the few companies that still
remain independent."
On Tuesday, the company's (IISLF: news, msgs)
shares rose 2 1/8 to 5 7/16.
The SAN revolution
StoreAge develops systems to connect servers and
storage peripherals but also offers software features
such as information and volume management.
"In essence, the SAN revolution is going to do to centralized storage
companies the same thing the PCs did to the mainframe industry," said IIS
Chief Executive Robi Hartman.
The action in the storage area network sector, sometimes referred to as
"fiber channel," is just starting to heat up. "Fiber channel has the potential
to be the next tornado within the overall networking industry," according
to a recent report from Robertson Stephens analysts Paul Johnson and
Ara Mizrakjian.
International Data Corp., a leading research firm, projects that fiber
channel will grow from 20 percent of storage interconnections this year to
60 percent by 2002. With storage capacity expected to grow about
sixfold in that time, IDC figures the market for products based on
fiber-channel technology will blossom from $2 billion in 1998 to $15
billion in 2002.
IIS's history
IIS went public in
November 1984,
when it raised $5
million on Nasdaq at a
split-adjusted $4.50
per share. In August
1993, IIS did a
secondary offering,
raising $20 million at
$63 per share. In the
following weeks, the stock reach its historic high at $100. Then it was all
down hill till the rock-bottom low of 31 cents per share in December
1998.
Hartman, formerly the CEO of Teledata, an Israeli telecommunications
equipment manufacturer, took the reins in late 1998. Up to that point, IIS
had been unsuccessfully engaged in the development of intelligent
peripheral products targeted at the IBM mainframe computing
environment.
Hartman sold off all the IBM-related activities and got rid of the
manufacturing plant, leaving the company with 12 engineers in the 58.5
percent-held StoreAge subsidiary, which he believes is the company's
best bet for the future.
And he's not the only one with such an optimistic view. Yehuda Zissapel,
president of the RAD-Binat Group, one of Israel's most respected
technology incubation houses, said the SAN area "is growing hand in hand
with the need for server and memory; therefore, the need for solutions like
StoreAge's is increasing exponentially."
The current lineup
Currently attracting attention in the field are such entries as Ancor
Communications (ANCR: news, msgs), Brocade Communications
Systems (BRCD: news, msgs), Emulex (EMLX: news, msgs), JNI (JNIC:
news, msgs), Gadzoox Networks (ZOOX: news, msgs) and QLogic
(QLGC: news, msgs), which was spun off out of Emulex (EMLX: news,
msgs) and Vixel (VIXL: news, msgs). All are up 100 percent or more
from their recent IPOs or from the beginning of the year.
Hartman pointed out that over the past few months consolidation and
prices for companies in the SAN area have increased substantially. In
July, IBM (IBM: news, msgs) purchased Mylex (MYLX: news, msgs) for
$240 million. In September, Dell (DELL: news, msgs) purchased
ConvergeNet Technologies for $340 million. Adaptec (ADPT: news,
msgs) purchased DPT for $235 million in November. And, this month,
Seagate (SEG: news, msgs) purchased XIOtech Corp. for $360 million.
"1999 was the year of the SAN infrastructure (backbone) buildup -- for
companies like Brocade, which manufacture switches and other
hardware," he said. "The year 2000 will be the year of the software
applications, for companies like IIS."
Eliav Alalof is an Israel-based writer.
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