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Strategies & Market Trends : Gorilla and King Portfolio candidates - Moderated -- Ignore unavailable to you. Want to Upgrade?

To: Brian who wrote (1529)	6/18/2005 5:22:26 PM
From: alanrs	Respond to of 2955

While this post probably won't be up to G & K standards, in that I'm not going to search for and link the relevant company release, I'll go ahead and put this out there in regards to OVTI. About a year and a half ago I seem to remember the company warning that revenues might be down as they transitioned to their new Omnipixel product. Their reason was that they were reducing the output of 3 megapixel chips so as not to have a large inventory of obsolete stock that would have to be written off, or some logic to that effect. In essence, my understanding of that release was that they could continue making and selling a soon to be obsolete product, thus keeping their revenues up and growing but leading to a large write off, or they could reduce production of the soon to be obsolete product and sell off the inventory, leading to reduced or stagnant revenue growth, but no large write off of obsolete inventory. One of the reasons I like this company is that they were very public about the trade offs of the two possible approaches, in addition to all the other valuation measures that indicate this company is selling way too cheaply (cash on hand, p/e, market share, CMOS vs. CCD). Since that time, whenever I hear complaints about recent revenue growth, I'm very aware that the above company release is not mentioned. I tend to make a decision based on my understanding of the details at a given point, and then forget (on purpose) all of those details and summarize the situation with a short sentence in my head which I can remember a year and a half after the fact. As such, it's entirely possible that I am remembering these details incorrectly. However, that is my current understanding of this company and I do own stock in it. ARS