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Stocks I / Innovex Inc.


Subject:  Re: Buy or bye-bye? Date:  2/10/2000  11:58 PM
Author:  DNeiman Number:  833 of 836

Strange message there, Andrew. The first paragraph sounds like you see no future in the company, then in the rest of it, you state good reasons for staying with them. It sounds like you really DON'T know which way to jump on this one.

By the way, the company agrees with you. They're NOT going to turn around in a week like a ".com" company. But they ARE going to turn around, and are deep in the process of doing so. It's going to take a few quarters--this Q is projected negative--but I think (don't hold me to this; I can't remember) they expect to be cash-flow positive for the overall year.

Your message makes a great case for going to annual meetings, especially of companies you have doubts about. I've gone to several, and always gain useful information about the past year and future prospects that helps me make better (although not always good) investment decisions. In the case of INVX, the meeting was held last week, just down the street from me (yay!), so I went to find out about exactly what you're agonizing over. Basic story is they're in transition (for the nth time, as you mention), to a new business model very heavy on flex circuit prototyping and production. They showed a great graph which indicated how much their business is going to swing towards flex percentage-wise--it's very impressive. The main reason they're in the red last Q and this one is that the company they bought out (Adflex) was near bankruptcy and had stopped prototyping. This caused a dip in revenues which is hitting INVX hardest right now. Their transition out of lead wire (bye! *sob!*) coincided with the gap in revenues from flex circuits, leading to their current low point.

I think you're right; they've done a good job transitioning and a couple of quarters will tell the tale.
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