SPECULATIVE & UNDISCIPLINED?
ADD LYT.V @ 0.40
Let’s see, on the PRO side, (1) It essentially double its revenues each quarter, and it appears that the trend will continue; (2) Visibility appears to be good with $6.8 million back log. Its F05 revenues appear secured; (3) Management expects a strong finish of Q4/04 and profitable for F05; (4) Reasonably clean balance sheet with practically no debt; (5) Management appears to be strong, confident, and knows what they are doing. On the CON side, (1) It is not profitable, and cash flow negative; (2) There are quite a lot of shares outstanding for such a small company, and the mention of 60 million warrants ($0.30 strike price) outstanding adds more discomforting.
I believe I have enough speculative positions already in my portfolio and I should definitely refrain from adding more. On the other hand, this appears to have a good story, reasonable visibility, upward trend and fairly strong momentum for such a small cap. The key is the Q4 results and F05 outlook. It probably a risk worth taking, as long as the position is relatively small (0.85%).
Let’s see, on the PRO side, (1) It essentially double its revenues each quarter, and it appears that the trend will continue; (2) Visibility appears to be good with $6.8 million back log. Its F05 revenues appear secured; (3) Management expects a strong finish of Q4/04 and profitable for F05; (4) Reasonably clean balance sheet with practically no debt; (5) Management appears to be strong, confident, and knows what they are doing. On the CON side, (1) It is not profitable, and cash flow negative; (2) There are quite a lot of shares outstanding for such a small company, and the mention of 60 million warrants ($0.30 strike price) outstanding adds more discomforting.
I believe I have enough speculative positions already in my portfolio and I should definitely refrain from adding more. On the other hand, this appears to have a good story, reasonable visibility, upward trend and fairly strong momentum for such a small cap. The key is the Q4 results and F05 outlook. It probably a risk worth taking, as long as the position is relatively small (0.85%).
posted by ZIGZAG at 11/16/2004 04:16:00 PM
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