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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Bob Rudd who wrote (14042)	2/27/2002 11:46:46 PM
From: Don Earl	Respond to of 78748

Bob, As close as I can tell on INLD it's a situation where it costs as much to host 300K accounts as it does to host 500K accounts. Their strategy so far looks to be mainly purchasing accounts and hosting those accounts on existing facilities. In theory they should eventually reach a point where the customer base is large enough to support the cost of the facilities. I agree the cash burn is higher than I would like to see. The only thing good about it is that there does seem to be a pattern of the burn rate decreasing, although a best guess is they will probably use another $60 million before (if) they hit a break even point. This is one I more or less planned to watch for another 6-12 months to see how they perform before taking anything like a longer term position in the stock. I still consider INLD more of a trading stock than an investing stock. "IF" they execute, $2 is cheap, if they don't, $1 would be expensive. I was half expecting to see better entry levels as a result of the Micron held shares hitting the market, but since those shares have changed hands, it seems like there might be some motivation on the part of the new institutional holders to promote the stock. I think there is fundamental value behind the stock, but my current position is probably based more on technical reasons than anything else. It looks to be coming out of an oversold condition on a retest of the last support level, which can be a good entry point for trading positions. As a buy and hold play, it probably makes sense to wait a few more quarters to see what kind of numbers they turn in. I don't think it's a bad one to put on a watch list to see what it does.