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Technology Stocks : INVX Innovex Comdex Winner !! -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (2518)	6/17/1998 6:05:00 PM
From: Kurthend	Read Replies (3) \| Respond to of 3029

Chris and Joel, Thanks for the article Chris. Joel: RE:>>does anyone think there is a direct relationship between sales of disk drives and pc sales growth.... not as dumb a question as it might appear... anyone have any considered thoughts on this? Definitely yes. Although I thought I read somewhere that the number of dd units sold vs PC units sold is around 1.5 to 1. I agree that Haley's remarks last week were negative on the short term. I will listen in on the next CC to see if they say anything about chip packaging. Below is an article I picked up on the Yahoo INVX thread. Kurt Enjoy: All of the following is excerpted directly from the RCR report on INVX of 6/2/98 Future Prospects: Changing Landscape The boom and bust cycles of the disk-drive industry have sent INVX and other component suppliers on a search for business opportunities elsewhere. Nearly 90% of INVX's business is derived from the volatile disk-drive industry. With INVX's production expected to shift to the HIF, the Precision Product Division is looking for ways to maximize the value of its existing manufacturing equipment while also looking for new business opportunities. The LPC division derives about $12 milion to $15 million in revenues from the medical and data communications industries annually, but hopes to grow its non-disk-drive-related business by designing fine-line flex circuits for use as an interconnect device in chip packaging. In a recent strategic planning meeting, INVX established an overall corporate objective of growing its non-disk-drive-related business through internal growth and acquisition to represent two-thirds of its total revenues within just five years. While this seems like a rather aggressive target, given teh large potential for chip packaging products and the cash horde than can be deployed for acquisitions, it may not be unreasonable. Potential change in Customer Mix: I early May, Western Digital (WDC) signed a sweeping agreement that gives WDC access to IBM's giant MR (GMR) and could result in WDC sourcing as much as $500 million in disk-drive components from IBM in 1999. How could this imapct INVX? Currently, Read-Rite is one of INVX's top three customers and WDC accounts for 51% of Read-Rite's business. As WDC sources components from IBM, it is likely to have a negative impact on Read-Rite's business; however, we suspect the effect on INVX will differ greatly. Rather than losing orders altogether, INVX expects its orders will just come from a different customer. INVESTMENT CONCLUSION: IT'S A MATTER OF TIMING The CEOs of Western Digital and Seagate have both been quoted as saying that the worst of the industry's woes are now behind it. INVX is hearing the same thing from its customers, but as yet, order rates and visibility have not improved significantly from the recent lows set in 2Q98. However, when the orders do rebound, the benefits to INVX will be as good as the recent declines were bad; in fact, the could be better if the HIF takes off as expected. In any case, the balance sheet remains rock solid with $47.7 million in cash ($3.25 per share) abd a negligible amount of debt. Although the ravages of the recent down cycle for the industry have besmirched INVX's otherwise sterling history of revenue and earnings growth, our confidence in management has only been enhanced by their ability to keep INVX in the black through a difficult period in the industry.