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Strategies & Market Trends : The Round Table: A work by the squares of the SNDK thread. -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (153)	5/21/1999 9:56:00 PM
From: Ausdauer	Read Replies (1) \| Respond to of 194

Paul, I read an article about Recoton a while back. Do they manufacture speakers for PC's? I believe that the article mentioned that many name brands actually have Recoton guts. Many adults still have PC's that are silent (unless you have a young kid who is into gaming with quadraphonic stereo). After all, there still aren't many web pages with audio and e-mail is similarly drab. The only problem I see with PC components like this is that they are very commoditized. Just like PC's and hard drives upgrades and 56K modems and sound cards and headphones and external drives... the prices are under steady pressure. For example, the market "marks down" players like Diamond Multimedia and Creative because of the thin margins on these products. The situation may be different for speaker systems. I will try to look into RCOT this weekend if I have a chance. Aus

To: Paul Senior who wrote (153)	5/22/1999 2:23:00 PM
From: phoenix	Respond to of 194

RE: RCOT Okay Paul, I bit on this one. Since I am a PSR guy you got my attention. Yes the value numbers on this one are eye opening. The fact that the market beat the stock price down on the recent earnings disappointment is also appealing. However,....... Low margins, low barriers to entry. All of their products are commodities. That in itself doesn't have me concerned if the company truly has great management, vision, and potential growth. I see nothing in the new releases or other material to make me think that these guys have a handle on how to come back to profitability. In fact, they recently hired a consulting firm to help them with this task. My experience with outside efficiency experts is they tell management what they want to hear, and management continues to do what they want after the consultant leaves their report. Recommendations are usually ignored or paid lip service to, and things go back to "business as usual". Warren Buffett only plays when all aspects are in his favor. With RCOT, I see two things going against it. Management and inherent low margins. Also, you may be trying to catch the falling knife. On the other hand, with the value numbers, it would not surprise me if you make money on this one. Good luck, Roger