Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Saul Feinberg Jr. who wrote (7533)	3/3/1998 1:41:00 PM
From: Dee Jay	Respond to of 42804

Saul, do we take the management at its word or do we consider themto be liars? They gave adequate reasons for the inventory increase (OEM customer losses but the products were being reboxed for std.product sales, build up to cut lead times on regular sales) and in fact said they were down already to close to normal levels. Remember, this is an outfit that eschews (that was not a sneeze) company hype in any way, shape or form - with respect to the stock, that is. They've achieved an admirable record for years and there's no reason to disbelieve what they've said, IMHO. Where they fell down was not anticipating the effect the news would have on non-thinking individuals (or those given to selling to play safe) and we had a buying opportunity as a result. At least that's how I saw it and I increased my holdings by 20%, averaging down at the same time. Also the sales mix is changing - 3 years ago, 2 years ago and a year ago OEMs were much more significant a factor than they are today and that change is all to the good. Reducing lead times in this fast paced world of networking is extremely important, especially when they have a jump in the GE switch area. FWIW. Dee Jay

To: Saul Feinberg Jr. who wrote (7533)	3/3/1998 2:01:00 PM
From: Sector Investor	Read Replies (2) \| Respond to of 42804

<<Does anyone out there feel satisfied with the explanation by the management regarding its rising inventories? Do you really feel comfortable with the explanation especially because it is so clear that in the last 4 years, the company had achieved rising sales and earnings without huge increases in inventories?>> Absolutely. OK so both NN and DEC unexpectedly stopped taking orders in Q4. NN because of problems and DEC because of sale of Networking unit to CS. Therefore MRVC has inventory on hand for them that doesn't get shipped. - Big deal, they are reducing OEM sales anyway as part of their new model. This kind of stuff happens with OEMs. Intentionally raising Inventories to reduce delivery time to customers only makes good business sense, so that's fine with me. Complete initial build of 2024 was in inventory per management as the product only started shipping late in December. That's reasonable to expect. I would like to see a breakdown of percentage inventory for each of the above, though and they could have informed the analysts of this prior to their quiet period.