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: SJS who wrote (10579)	8/31/1998 11:01:00 PM
From: Robert G. Harrell	Respond to of 42804

Well, happy birthday to me. What a swell way to celebrate #53. Maybe if Texas A&M goes ahead and beats FSU, the day will be salvaged though I won't be any richer. I listened to the CC but didn't tape it. I wasn't expecting it to be so long. I may go back and tape it so I'll have it for future reference. My impression was they were chastised, perhaps even a little rattled. This strikes me as a real critical inflection point for the company. They can work through these growth pains making the appropriate "half time adjustments," coaching changes, revamping the offense, etc. and go on to resume winning seasons in a couple of years or they can muff it and slowly fade away. I can remember when FSU football was a joke and the Gators always won. Not so any more but it didn't happen overnight and certainly not without some disappointing seasons along the way. Maybe MRVC is just in a building year. I didn't sense nearly the confidence that Noam usually shows. His closing remarks seemed very tentative. If this had been a video conference, I don't think he would have looked like the cat who ate the canary like he did one time on CNBC. The analysts on the call didn't sound like they thought MRV was dead meat but they certainly sounded like the future definitely hinged on the new cutting edge technology. It was encouraging that there are some big co's waiting to beta test one of the new technologies. Noam sounded pretty confident that no one had one of their new products (dynamic DWDM switch?)--can't remember. I'm anxious to see if there are any revised earnings estimates on my Zacks overnight in the morning. If they all agree with the $.85 and $.95 estimates just posted, then even at $7 we are only looking at a PE of 8+. I could easily average my cost down to $15 which would be a P/E of 15.8 on the '99 estimate. That doesn't sound too undoable. (Nuts, FSU just went ahead.) The downside is there may still be a lot of overhead resistance all the way up and it is late enough in the year that tax loss selling could kick in just as the price starts to rise. What do you all think? Has the overhead already been eliminated and the tax selling done with the huge volume the last two days? It could conceivably still be sitting near $6 or 7 at year end when a lot more questions could be answered. I'm wondering if I'd be smarter to risk paying a couple dollars more in 4 or 5 months maybe knowing much more than we do now rather than buying more below $6 but with many imponderables. Then again if there is a big contract win or a buy out it could gap up several dollars overnight. I'd like to hear other impressions of the conf. call and opinions of the risk/reward of buying more now below $6 vs waiting until after Q1 earnings and paying more but with perhaps much better visability. All right!! FSU just turned it over . I'm going to watch the game. Night all. Bob

To: SJS who wrote (10579)	9/1/1998 12:20:00 AM
From: Grommit	Read Replies (1) \| Respond to of 42804

1999 EPS estimate -- When you posted this Since we believe the company will continue to invest in its R&D and its sales and marketing capabilities, we are trimming our 1999 EPS estimate to $0.90 from $1.75 It sounded to me like BEST did the R&D and Mkt without brushing it past MRVC. And I wondered about the $0.90 so I just did my own estimate. ACT YTD 1H 2H EST TOTAL estimate 97 98 98 98 99 ------ ---------------------- --------- sales 165.5 126.6 118.4 245.0 315.0 28.6% costs 94.7 70.8 69.0 139.8 185.9 32.9% margin 42.8% 44.1% 41.7% 42.9% 41.0% R&D 13.1 10.5 12.0 22.5 28.0 24.4% SG&A 27.4 23.6 27.0 50.6 62.0 22.6% Operating Inc 30.3 21.7 10.4 32.1 39.2 22.0% Net Income 22.6 16.2 7.8 24.0 29.4 22.3% Shares 25,730 26,440 28,536 28,536 EPS 0.88 0.61 0.27 0.89 1.03 16.1% assumptions - * BEST for revenue 1998 and 1999 * MRVC press release for Gross Margin 1998 (low end of 43-45% range, or slightly lower, they said) Then I continued the trend for 41% in 1999 -- My guess. * SGA/R&D split unimportant - the total is the key. 10% over Q2 gives $19M Q3, or $39M in 2nd half. Then I threw in 23% growth in 99, but I hope they control it if revenue and GM are as indicated. Answer is $1.06 EPS vs. BEST .90 EPS which is 16% EPS growth over total 1998. revenue growth 28% Fair Value December 1999... $1.06 * 20-25 = $21-$27 Regards, Grommit

To: SJS who wrote (10579)	9/1/1998 9:48:00 AM
From: Greg h2o	Read Replies (1) \| Respond to of 42804

<< The buy rating is almost laughable with these reductions. It's just lip-service.>> Is it? They had their chance to lower their rating before the opening but decided to reiterate a buy. Most houses would have lowered to a sell and not taken the 8 point decline on paper. We all know how that works. They decided not to. Hey, I mean we're looking at a sub $6 stock that is targeted to have $0.90 per share next year. I don't know what you think, but if those numbers are on the low end (which nobody will know for 12 months) we could see a nice move from the current level. I have yet to buy because I am holding on to cash. However, it is starting to look attractive to me... I still like their technology. It's a tough call. regards, greg