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I know ELON has 80% of market share for their Neuron chip, does this company qualify at all.

I assume you are talking about Echelon Corporation, who goes by the ticker symbol ELON. I had never heard of them prior to your post, so I took a quick glance over at the Hoover's website (http://www.hoovers.com) to get a feel for what they do and how their financials look. Here's what I found:

http://www.hoovers.com/co/capsule/9/0,2163,57219,00.html


Business Description

Think "The Clapper" but on a much grander scale. Echelon makes products that control distributed networks for the building, industrial, and transportation automation industries. Its technology embeds control capabilities into individual control devices and enables several such devices to be connected. Its products, which include transceivers, routers, network interfaces, and development software, sense, monitor, and control such equipment as automatic doors, lighting, security systems, industrial conveyors, and rail cars. Echelon has developed products with Cisco that control devices via the Internet. Customers include Honeywell, Johnson Controls, and Raytheon. Motorola owns a minority stake in the company.


Financials

Total Sales (TTM) ~$40 million
Gross Margins ~61%
Net Margins less than 0%
Cash/Debt ~5.8
Flow Ratio 5.35 (wowsers!)

Based on this data, my initial guess would be NO, they are not a Rule Maker. We generally like our companies to have annual sales of $1 billion, which they are nowhere near. Gross Margins look fine, but Net Margins fall way short of the 7% threshold. Cash/Debt Ratio looks good, but that Flow Ratio is absolutely horrible! I don't think I've ever seen one that high. And we haven't even started talking about their competitors yet. Now granted, I was using Hoover's numbers, so their may be some intrepretation errors there, but I still think this one has a ways to go to reach Rule Makerdom.

In any event, feel free to run ELON through the ranker spreadsheet, and post your results here. I'm sure you'll get plenty of commentary from the Fools here on your findings.

Fool On!

the LanceMan



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