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

To: OGM who wrote (2676)	9/21/1998 2:48:00 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 3029

Beats me. You would have to decide that for yourself.

To: OGM who wrote (2676)	9/21/1998 3:52:00 PM
From: Mark Oliver	Read Replies (3) \| Respond to of 3029

What's the bottom? Who knows. If you read a lot of stories from many areas, you get the feeling that inventories are near corrected and there is some hope for better PC sales in the latter half than was expecting. Quantum for example told us at the annual meeting they expected to see sequential improvement in Sept and Dec based on current indications. Maybe that's enough to make Innovex go up over the next month(?). Since the majority of disk drives still use old technology, INVX will sell parts going into most drives this year. The worst season of the year has ended and should things fall to normal patterns, a better season lies ahead. This may not happen. If it does, we should see Innovex book 2 more profitable quarters with sequential earnings increases. So, it all depends on what you believe will happen to PC demand and inventories for a short term view. But, these next 2 quarters are not the issue if you want to be long on this stock. Short term, I think it's worth a point or 2 at least barring the market collapse Joel predicts. Long term, Innovex's current work horse product of wires are being replaced. Innovex has not succeeded in winning enough customers for their successor product HIF which is like a miniature ribbon cable.. It looks like laminated circuits like TSA from Hutchinson are preferred because it's easier to attach the head. Seagate is Innovex's only announced HIF customer, using millions of them in their highest end product the Cheetah. Innovex hopes to solve this problem by bonding the ribbon to the suspension and there by making equally easy to stick the head on the suspension. Unfortunately, Innovex's development of this pre-bonding has involved some engineers who recently left Hutchinson. Hutchinson is trying to block their work saying it's just stealing their technology and helping Innovex. Makes things a little cloudy. Still, pre-bonded circuits are out for evaluation this month. It would appear if Innovex could get pre-bonded suspensions accepted, they would have the lowest cost product. They certainly have no problem getting access to decision makers as they have served them so well until now. If the product works, it will sell. If what's happening today remained static, Innovex will loose market share as every new drive is developed. They must get HIF accepted in some form. That's what makes this a tricky investment. You would think the fact that Seagate is using millions of these loose HIF connections would be enough, but apparently Seagate doesn't really want to share their attachment techniques with other drive makers. Should Innovex either gain a new customer, or loose Seagate, the effect would be dramatic. Finally, if you based the company on futures, they say they have a leading edge product for new IC surface mounting technologies that could dwarf their current business in disk drives. That is yet to be proven. The market does not seem to put any value on this business. I will visit the Innovex booth and many others at the DISKCON show tomorrow in San Jose California. I highly recommend anyone who can attend do so. There is nothing better than talking to people and looking them in the eye. Maybe we'll see some news coming this week. So, that's my long winded explanation. It's just my opinions and observations. Regards, Mark PS One can not discount market sentiment. We have a lot of shareholders who will want to take tax losses. If they might dump Innovex if they haven't already. It is not a safe time to invest. You can take a cash position like Joel, or be a stock picker and try to find value. Seemed to be strong today.