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Strategies & Market Trends : Position Trading Forum -- Ignore unavailable to you. Want to Upgrade?

To: Sam Nizam who wrote (6868)	11/16/1998 12:25:00 AM
From: Bogeey	Read Replies (2) \| Respond to of 7247

IOM...Several posters here liked IOM for this week, here is a section from a Barrons article that may affect the stock this week. Case in point: that erstwhile speculative dandy, Iomega. Back in the bad old days of early October, the stock could be had for less than $3 a share. As the froth flecked ever higher in the tech sector, however, Iomega rose from the depths to around 9 before pausing to catch its breath. Friday, it was trading at 7 and change, still a very neat gain from its low a mere month before. Kate Welling, who knows about such arcane matters as slipped disc makers, tells us that besides the nondiscriminatory enthusiasm for busted techs, interest in Iomega has been fanned because a competitor, Syquest, bit the dust. But Syquest or no Syquest, Iomega doesn't lack for pressure on its profit margins. Despite big volume gains in Zip drives and discs, which chip in roughly 70% of revenues, overall sales in the third quarter were down 9% from a year ago, as prices continued to tank. And the company finished firmly in the red. While bulls (i.e., analysts who recommended the stock originally at 20, changed from a "strong buy" to a "buy" at 15 and from a "buy" to "accumulate" at 10) insist the worst is over, don't pop the cork for Iomega's recovery prospects just yet. For this week, at the Comdex show in Las Vegas, Fuji and Sony are due to unveil disc products that, especially Sony's, are creating lots of anticipatory buzz and seem destined to provide Iomega with meaner competition than a barrelful of Syquests. Iomega, in short, demonstrates that every stock that has sunk to low single digits isn't necessarily a screaming buy or even a screaming accumulate. It might merely be efficiently priced.