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Stocks I / Innovex Inc.

URL:  http://boards.fool.com/my-take-11774242.aspx

Subject:  My Take Date:  1/8/2000  2:36 PM
Author:  rmw95 Number:  827 of 836

I've been a shareholder for some time. Decided to take a fresh look at INVX by doing some online research and then re-reading some reports by a Minneapolis analyst whose reports are generally interesting, insightful and informative.

Summary: the analyst is cautiously bullish on INVX

Key points:

Pluses:

Wire business no longer a drag on performance since it's been written off;
They've received first chip packaging qualification;
Disk drive business improving;
FSA volumes ramping up;
ADFlex adds valuable product diversity;
Strong balance sheet;
This analyst's predictions for INVX two years ago (that it would decline significantly as the wires business died) were right on;


Minuses:

This analyst has underestimated the risks for a company in this industry and at this stage of development before (in an analysis of Sheldahl back in March of 1997). Sheldahl's example shows that qualifications and pre-production orders are clearly good signs but it is imperative not to read too much into them. There can be a long and costly time required to reach serious production volumes. (The "tentative outlook" in 1997 for SHEL in fiscal 1999 was for "EPS of $2.00 per share. If the Longmont endeavor is successful" (which it has not been yet) "we believe there could be significant upside to this number." SHEL continues to post losses due largely to the drag of their Longmont facility.

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Thoughts? Is the comparison to Sheldahl's sitution valid? If not, why do we expect INVX to have an easier go of it in chip packaging and the like?
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