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Monday, December 29, 1997 Friday, Iomega closed at $12 5/16, down $3/16 (-1.50%). THIS WEEKEND'S RECAP: Following the holiday break and abbreviated trading day on Friday, Iomega board posters reacted to news about Nomai disks being available for sale in Germany (see ~DaleVelk~'s post), earnings, clik!, and other tech stocks. Enjoy! INDEX: Use the Search or Find feature of your word processor to locate the article number (Find: 1++, 3++, etc.) - or use AOL's Edit>>Find in Top Window Feature. If Find in Top Window is dimmed, just click on some text, anything, in the IOM Today window and try again.
1++ JOHKGUN analyzes earning potential for Iomega
Recap written by TMF Weekly; posts
compiled by TMF Weekly. As always, the following posts represent the thoughts of our contributors, not those of The Motley Fool.
And now, the Best of the Board...Started 8:01pm ET 12/26/97. 1+++++++++++++++++++++++++++
Subject: Re: YTD return how about the earnings growth vs carryforward p/e? It is selling at carryforward p/e of 20 while earnings is still growing at 39%. undervalued? may be. Overvalued? obviously NOT! say, IOM grows another 30% the following year, its carryforward p/e would have dropped to $1.60/$24 = 15; but, this company is still growing its earnings at 35% annually(39%/30% = 69%/2 = approximately 35%). And, it is selling at carryforward p/e of only 15. So, two years out, IOM should double if given proper valuation to its growth rate. We will see! Of course, all prices pre-split and do not include revenue from 'click"(potential is bigger than zip, I read somewhere, I think IBD.) 2+++++++++++++++++++++++++++
Subject: Re: YTD return <<We will see! Of course, all prices pre-split and do not include revenue from 'click" (potential is bigger than zip, I read somewhere, I think IBD.)>> Johkgun, You're absolutely correct as to what you read. It was IBD, but it was Stan Corker from Emerald who said it. "Iomega hopes for the same results with its new portable disk drive. ''Potentially Clik can be bigger than Zip,'' said Stan Corker of Emerald Research." It's this "potential" that's keeping me from selling any of my shares. ; ) 3+++++++++++++++++++++++++++
Subject: Re: "shipment press releases" << 11 million shiped etc is this number of zips sold to retailers? oem? combined? >> ..iomega has annonuced milestones that represent the number of Zip drives shipped.. ..ALL varieties...oem/aftermrket/etc.. ..this number does NOT include those Zips made by the liscensees....MCI/NEC.. ..Iomega has stated that they will stop announcing this figure in the future, and I'd guess, that some of the reasoning may have to do with the fact that MCI/NEC will be ramping, and the total # of drives would be more difficult to quantify.. 4+++++++++++++++++++++++++++
Subject: Re: YTD return <<..yeah, but Steve, Kim Edwards recently spoke of being a 5 BILLION dollar company..>> Huibs: That is great. But the numbers have to come from somewhere,. I have experienced the same trouble in future estimates as all of Wall Street, and they have much more access than I. Cannot estimate anything for Clik, Zip 200, or even gratiating OEM internal margins without stretching the guesswork too far. Internal margins for OEM drives are known to reduce the eps growth rate going forward. That will presumably be made up for by volume and margins on disks. Some with new products. I have estimated (perhaps more gratious than most analysts), over 100 million zips in the market inside of 5 years. Given than that growth must come primarily from the box makers, both revenues and earnings are reduced per unit going forward as percentage of Zips to OEM becomes the dominant segment. Disk sales to this market segment are initially lower, and are difficult to compute going forward as well. The reasons have been well documented here and elsewhere, primarily due to the fact that retail customers specifically bought Zip, where as the boxes have a built-in inclusionary factor that lowers the tie ratio for this non-targeted group. It is also an unknown at this point how much of an effect the 200 MB drive will have on the oem channel. 1) The product is not in the marketplace yet. 2) It is not known what margins these devices will deliver )I presume higher) 3) It is not known when, or how the 200MB drive will enter the OEM channel. The JAZ 2 GB is also an unknown quantity. Clik will have to prove its metal in the marketplace (the OEM acceptance marketplace). These are the unknowns. Most of the hardcore facts are unknown, and are compounded by the fact that vital pieces of financial data are also unknown. This is why the stock remains volatile and not as closely followed as some others. I am not throwing out negatives, but merely stating the same quaestions that have been thrown around here for 2+ years. It's easier to throw up a figure than it is to break down the unit sales needed to obtain those figures. If you start your forecast with estimated unit shipments per product segment, you will see how hard it is to achieve those $3 to $5 billion revenue targets. I.m not saying they won't, I'm just saying I don't have (and neither do the analysts), enough good info to get to them yet myself. 5+++++++++++++++++++++++++++
Subject: German/French Rulings on Nomai Disks http://www.zdnet.de/news/artikel/1997/12/24002-wf.htm Iomega Zip-Drive: Boeder darf geklonte Disk v... From the automated translation it appears that Nomai Zip disks may now be sold in Germany but the packaging may not state "100% compatible" but may say "for Zip drives" 6+++++++++++++++++++++++++++
Subject: Re: German/French Rulings on Nomai Disks << I have to think that supplies of Zip drives in Germany will be tight for a couple of weeks as Iomega replaces the inventory there with the (assumed) redesigned ATAPI and external Zip drives. >> I agree, Dan. And if our understanding of retroreflector technology is correct, and I think it is (thanks to AuntArctic) Iomega may not have a single, discrete design in mind. They could induce a "wobble' in the position of their emitter/detector from one lot to the next, for example, or put light baffles with randomly variable properties in selected drives, or in all drives. Iomega has lots of ways, IMO, of making compatibility an endlessly moving target for would-be pirates with "reverse-engineered" disks of questionable quality. The licensees knew this going in, or they wouldn't have signed on. The Nomai disk an enormous defeat? I doubt it. Even to call this a significant setback would be phrasing it too strongly, in my view. Gillette has had a much tougher row to hoe so far as cloners are concerned, and they certainly can't be accused of being unprofitable---it seems many people would rather buy Gillette blades than save a few bucks on the clones. Now imagine how well the cloned blades would sell if they only worked in some, not all, of the Gillette razors they were designed to fit. 7+++++++++++++++++++++++++++
Subject: Iomega in Perspective for l997 In reading my Daily Graph charts, I find that IOM has suffered a lot less than most of the other computer related stocks out there. When the rest of the industry picks up then IOM will probably make up for lost ground quickly. Here is a comparison of the percentage off the l997 highs of IOM compared with a sampling of other computer stocks. Percentage off l997 Highs Iomega 27% Intel 31% Microsoft 20% Newbridge Net 52% Novell 44% Oracle 49% Quantum 55% Seagate 65% Sybase 47% Western Digital 73% C Cube Micro 58% As you are probably aware, Microsoft, lost most of its percentage in the last week or two and its chart looks dismal. The point I am trying to make is that it could be worse and the downfall of IOM is primarily due to association with the industry not fundamentals. _______________________________ End Report. Posts covered through 9:00pm ET 12/28/97 _______________________________
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