To: hoffy who wrote (598 ) 5/23/1999 3:22:00 PM From: David Haines Read Replies (1) | Respond to
Here are my thoughts on Hauppauge Digital (HAUP). First of all, Hauppauge has been growing revenues and earnings at a very rapid pace with 1Q sales up 85% to $14.5 million from only $7.8 million a year ago, and even more impressive, earnings per share up 188% to $0.20 vs only $0.07 a year ago and all of this in a quarter that is notoriously slow for PC component sales. Second, Hauppauge only has 4.3 million shares outstanding which means even with Friday's big runnup, at $27 13/16 Hauppauge has a total market cap of not even $120 milion which is a welcome relief compared to other "hot" recent companies such as EToys with less revenues and no earnings boasting a market cap of $6.9 billion, or AtHome again with similar revenues and no earnings at $16.4 billion or the almightly AOL boasting a market cap of $136 billion. AT $27 13/16, Hauppauge is trading at barely 2x trailing sales! It gets even better, looking at Hauppauge's balance sheet as of March 31, 1999, you see they have over $5.7 million in cash and absolutely no long or short term debt. They are the leader in their field of digital video, TV and data broadcast receiver products for the PC and considering digital TV and e commerce look to be the hot technologies of the near future, they will no doubt continue to grow at a very rapid pace as the increased speeds of broadband and digital blends the fields of television and the internet. They will begin shipping their digital WinTV products by the end of the summer. Also, as the Business Week article suggests, Hauppauge is rumored to be in talks with a "big internet company" which would dramatically boost their sales. With a float of only 2.6 million shares (only 2,600 investors averaging 1000 shares each) and the incredible momentum it received on Friday trouncing its previous 52 week high on incredible volume, someone would have to be out of their mind to sell or short the company here at $27??? That is barely 2x sales for a company growing at 85% plus that is a leader in the fields of video conferencing and digital TV for the PC??? I plan on buying aggressively Monday morning.
