To: Judy who wrote (7437 ) 3/27/1998 8:34:00 PM From: Robert Graham Read Replies (3) | Respond to
I do see the technology of embedded systems playing an increasing role in the implementation of future products. I looked at the past history of WIND and found that even though the ballance sheet of the company is more like that of a very young startup type of company, this company has been around for several years. This company apparently did well initially and then ran into some problems in 1995, if not earlier. Wind River Systems has shown an improving earnings picture since them. So I see a buildup of booked earnings over the past few years except I think this overstates the improving financial health of the company. They now have a very large float compared with their assets and current revenue. This is probable one reason they could not float stock for their recent infusion of new capital. A second look at the balance sheet indicates to me that one reason their A/R is high is due to revenue that has been booked as "deferred revenue" which apparently has doubled since the previous year. I wonder where this came from and the what the likelihood is of this "deferred" revenue turning into real revenue in the near future? But as long as they can manage their cashflow and continue generating business with key customers like INTC and CSCO, then I agree that this company can end up to continue to generate growth in earnings. But the question is how timely will the growth in earnings be? After all, unless you are going to invest in this stock instead of trade it for short term profits, it would be nice to see earnings results in the near future. Perhaps you think that the institutions will acumulate this stock and this is what you are looking for apart from an improving short term earnings picture?
