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OmniVision Technologies, Inc. Message Board

  • porcupineonweed porcupineonweed Nov 24, 2013 5:29 PM Flag

    Inventory

    The inventory this company has as a percentage of assets is worrisome to me. Anyone have thoughts? How much of this inventory is "bad"?

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    • I think they lost out on business years ago because they couldn't deliver timely on high volume projects. Think of it as an alternative strategy to investing in plant and equipment - I actually see it as a less risky model. If you read their recent 10-Q, I believe something like 50% or higher of the inventory is WIP, so I doubt that it is stale. Also, remember that the inventory is carried at cost (and net of reserves), so it's fair value at any point in time is 25% higher than reported.

 
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