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Dense-Pac Microsystems (DPAC) Message Board

  • corrupt_one corrupt_one Jan 17, 2001 5:08 PM Flag

    Re: All shorts are idiots !

    No, all shorts are not idiots. I am a nubie short, but have done quite well at it.

    As for DPAC, I wouldn't sort this one, especially at such a low price and given what I perceive to have pounded DPAC down so far:

    -The momentum players drove DPAC to far to fast.
    -The momentum players over-reacted to TWP's initial downgrade from a strong buy to a buy.
    -Interest rates went against the market.
    -A short term shortage of cheap stackable product occurred, causing earning to drop for a quarter and projected earnings to be lowered by TWP.
    -TWP, based on the lowered earnings projections, downgraded DPAC to a market perform (hold)
    -DPAC also experienced an end of the year tax sell-off.

    My crystal ball now sees a change in DPAC's near term fortune. Why?

    -The momentum crowd is gone.
    -Interest rates have turned down.
    -Tax relief is a priority of the new Washington gang.
    -The shortage of cheap chips was short lived as predicted by DPAC
    -DPAC's eps bounce back as of its last quarter.
    -DPAC has now had 4 consecutve quarters of being in the black.
    -DPAC has diversified into stacking DSP as well as memory chips.
    -DPAC's aquisition of PEP is immediately accretive to earnings, increases its visibility and leadership in the stacking niche.
    -DPAC's sale of Typehaus, which had been a drain on earnings for years. (Cannot recall if this was a sale of the subdivision or only its assets, no difference.)
    -The stock repurchase plan.
    -DPAC tends to suffer short term along with the PC chip industry. This is a mistake of which an advantage may be taken.
    -A long term growth rate from TWP of 50% and a PE of 15
    -Strong management.

    DPAC doesn't manufacture chips at all, but stacks chips, usually for OEMs, and these are not PC chips. Ignoring the militairy/aerospace market, DPAC's recent commercial success has been stacking memory chips for servers; not PCs. Most recently, it brandhed into stacking DSP chips, which have an extemely wide application.

    For the foregoing reasons, and a few others that I will keep to myself, I expect that we will shortly see an uprade from TWP, probably on the heels of the next FED meeting.

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    • right on. I have been as frustrated as anyone with the market in general and dpac in specific. However your points both pro and con are on the mark. We need increased volume and some substancial news as well as increased revenue and earnings. I feel all of these are on the way but realize how frustrating it is waiting. It would be nice to return to the $5 level so it can return to marginability. Keep the faith. Jeff

    • I agree with you that shorting can be very profitable BUT not in DPAC's current levels.

      I do believe the original mesg. was shorting DPAC at these levels. Who would do that?

      May I submit to you a correction? You included , in your list , that DPAC had 4 cons. profitable qtrs. I believe that should be 8 now and soon to be 9.

      Good day.