|To: Roy F who wrote (198)||7/10/1998 11:13:00 PM|
|From: Roadkill|| Read Replies (2) | Respond to of 6996|
What are your thoughts on this press release, Roy?|
When I first read it this morning, I dismissed it as (1) a rather weak way to support the stock, (2) a way to prepare us for crappy earnings, or (3) both.
Re-reading it this evening -- a little more carefully, I admit -- I saw for the first time the following:
"We believe the result of this positive response may be a ten-fold
increase in TACNAV sales to the U.S. military."
This is a serious statement. The use of "ten-fold", even under the SEC "Safe Harbor" guidelines, indicates dramatic possibilities. The $11 million sold to date has been spread over three years or so. Even spreading the possible $100 million over three years, with existing customer revenues this would create serious top-line growth. Considering that we currently trade at a trailing PSR of about 1, and considering that we would go to a PSR of at least 2 or 3 with any sort of consistent, growing revenue base, this statement implies serious growth in the stock price. It is notable that MKVH didn't say "double" or even "triple", but "ten-fold".
Does anyone out there have any insight into the FOG technology? Does it really add enough to KVH's existing products to stimulate this kind of demand? I'd be interested to hear some thoughts on this.