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Non-Tech : Any info about Iomega (IOM)? -- Ignore unavailable to you. Want to Upgrade?

To: Linda Pearson who wrote (49681)	3/10/1998 6:54:00 PM
From: Herb Fuller	Read Replies (1) \| Respond to of 58324

All ,Re:>>> chatfield's take on Iomega <<< IOMEGA CORPORATION NYSE/IOM/$8.88 (2/23/98) - Risk Rating: Growth With Risk Chatfield Dean does not make a market in this security. -------------------------------------------------------------------------------- In our opinion, Iomega Corporation continues to be undervalued, despite having announced that it achieved its first milestone of FY'98. On February 13, the Company announced that it began U.S. shipment of its "Buz" multimedia producer. This new product is a combination video capture card, Ultra SCSI controller and software suite that allows users to download home movies, photos and music from camcorders, DVD-ROMs, digital cameras, VCRs and laser disks into a personal computer. Designed to be easy to use, the product includes a mouse-sized system, called a "Buz box", that plugs into the back of the computer and serves as a single connection for all multimedia devices and it has an Ultra SCSI controller which allows users to connect to scanners, CD-ROM drives, Zip drives and Jaz drives. Overall, Buz facilitates multimedia capture, editing and saving onto a Zip or Jaz drive, making it the easiest, low-cost way to use these technologies in combination, at this time. We expect that Buz will not contribute significantly to Iomega's revenue until the second-half of 1998, but should, combined with timely shipment of other new products Jaz 2 and click!, increase investor confidence that the Company is introducing new products on time. With regard to other recent announcements, there has been some concern expressed in the investment community regarding the February 16 U.S. District Court ruling against Iomega. The Court ruled that Nomai SA, a French disk maker, can sell its XHD removable storage disks that Nomai labels as Zip compatible. Nomai claims that it will undercut Iomega's prices by 30% in the U.S. According to Iomega, two independent laboratories evaluated the product and showed that the XHD cartridges had greater than 50% rejection rates in both PC and Macintosh notebook Zip drives. The tests also demonstrated that 25% of randomly selected XHD cartridges were inoperable with internal Zip drives, and that 40% of the Zip drives tested with the cartridges exhibited head damage. In our opinion, Nomai's price competition will not erode Iomega's market share if, indeed, Nomai's disks do not work effectively and can cause damage to users' existing hardware. We believe that timely new product introductions, and steady revenue growth, could fuel the stock to trade at an expanded P/E of 25X, a multiple at which IOM shares have traded in the recent past. Using consensus earnings estimates of $0.54 for FY'98, we calculate a 12 month price target of $14, and discounting this price target by 20%, to account for the risk inherent in an investment in Iomega shares, indicates a buy limit of $11. We recommend investment in IOM shares with a BUY rating for the portfolios of risk-tolerant, growth oriented investors. Additional information relating to Iomega can be obtained by visiting http:\\www.chatfield.com or iomega.com. --------------------------------------------------------------------------------