It sounds to me like you have a fairly good grip on what to buy and what to avoid within the distressed microcap market segment. I want to make one thing extremely clear to you and the others on this chat board, I am not an expert in selecting distressed microcaps for investment purposes. That being the case, I could just as easily be wrong as being right with respect to my opinion on DAIO. I only go with what my gut instinct tells me after accumulating as much information on the company as is possible.
As I've mentioned previously, my general focus in recent years has been directed into young and fast growing (just out of the box) medical device equipment manufacturers. I've had a fair amount of success in that arena. The reason I continue to be interested in DAIO is for the reason that I started following the company from the early 80's when they went public. I've been into their stock on at least a half dozen occassions with very limited success. Added to this, the company is practically in my back yard and I make annual visits there during shareholder meetings. I've also had the pleasure of meeting and talking with their leaders during the shareholder meetings and I have sources who continue to have contacts at the company. I get plenty of information as to what's happening over there so I continue to maintain an interest. I am not currently a shareholder. At this time, I'm just watching and waiting for a possible good investment opportunity.
If you want "expert" type guidance on the DAIO situation, I would highly recommend that you pay particular attention to Fujigrower and Commandor on this chat board. They have impressed with their comments although I don't agree with everything they say.
Here is wishing you the best with your investment decisions.
I am not an expert in DAIO's market segment, heck I'm not even an amateur. I just buy what I consider to be cheap stocks in all sectors. For the most part, I ignore negative comments by board experts because they don't recognize that value exists (as set by the price/market cap) despite the fact that the individual stock or sector may be in a distressed situation. There are always reasons not to buy cheap stocks, they certainly didn't get their because they've excelled. But buying cheap/crappy companies makes sense if their stock price is even crappier.
Having said that, your posts are far more interesting and informed than most board experts. In fact, they probably have kept me from buying even more DAIO.
While I can't wish you good luck on your target buys in the mid ones, I will probably be buying along with you if she gets there.
With due respect to Fujigrower's position as stated in his msg. #2154, I strongly take the opposite viewpoint.
If DAIO should falter in their operations,(lets hope that does not happen)its my belief no other firm would be interested in buying them out. The reason is quite simple from my standpoint. If that event should occur, the chip companies would still have around 70% of the device programmer equipment market to address end product requirements. This would include both manual and automated type manufacturers. Added to this, why would a large market capitalization company even want to bother with acquiring a relatively small sized operation with very little, if any, growth and profit potential? I simply do not see the benefit. It would be a drag on their operations and a poor business decision.
Lets hear from some of you other folks on this matter. What's your position?
While we wait for others to weigh in on the question of whether Data I/O would be a acquisition target if the business plan were to falter, I'll speculate a bit more on my acquisition theory.
The competition among chip manufacturers is fierce. Presumably they are looking for something to differentiate themselves besides price.
Our friends at Hewlett Packard figured out they could sell the printers for break-even (or less) and rack up their profits by selling ink catridges.
If Samsung, Intel or any other large flash memory chip manufacturer were to buy Data I/O, they could build a large volume of cutting edge programmers and lease them to program centers and/or electronics manufacturers "at cost." The lease fee would be minimal if the programming center/electronics manufacturer buys a target volume of Samsung chips. The plan would not be to make money selling flash memory programming equipment, but rather more flash memory chips.
Another scenerio would be if a well run chip programming center wanted to expand globally. Buying Data I/O would give them access to the best flash programming equipment and technology in the world. They could use that to produce programming machines to set up "Kinkos" versions of chip programming centers in either satellites or franchise facilities around the world. Each programming center would be standardized with a variety of new, efficient DAIO programming machines to handle virtually any programming job.
This is a simply apple grower speculation and logic... always a dangerous combination... so I'll look forward to someone stepping in to shoot down my theory.
What does not make sense, however, is sustaining the current chip programming equipment market where an ecclectic collection of small niche players fight offer piecemeal solutions at marginal profit levels. In a global market where borders are fading fast, an efficient global player should be able to offer customers a more competitive, efficient solution chip programming solution and do it profitably. The same should be true of chip programming centers.
That is enough speculative theory to paint a large bulls eye on my backside. I look forward to hearing other views.
P.S. If my theories all fail and no-one else will step in to buy Data I/O, we may just buy it to get Fred Hume. He is an excellent leader and could be a big help with our apple picking crew. Anyone know if Fred can sing Ranchero ballads in Spanish?