DRAM $3.76 ..12-MONTH TARGET: $30+ -REASONS: 1) RAISING 2013 MEMORY PRICES, 2) NEW MEMORY/SOFTWARE MANUFACTURING DEAL WITH AMD, 3) LO FLOAT
1) DRAM’s fundamentals and the price that can support have increased exponentially within the last three months (see reasons below)
2) Dataram Corp. (NASDAQ:DRAM) is trading at 60c/share pre recent 6/1 reverse split. This is 1/10 of the 2010 share price.
3) DRAM is trading at 0.2 current and 0.1 projected X sales vs. 1.5 sector average
4) Current market cap: $7 million
5) Forecast 12-month: : $50 million
6) Forward 12-month net income: $1/share
Reasons for recent improvement in fundametals:
1. DRAM/memory prices have increased almost 70% this year according to the DRAM Index (DXI – do web search for dram exchange for DXI chart).
2. Rich AMD manufacturing deal (announced by both companies in May 2013) calls for: A) DRAM to manufacture AMD’s Gamer Series memory modules for gaming enthusiast currently selling at $155 at Newegg, and B) AMD to use DRAM’s RAMDisk software technology in all its Radeon and Gamer Series product lines.
DRAM’s CEO John Freeman stated the following during the last earnings report for the quarter ending 1/31/2013 (before memory prices literally exploded upwards and before the AMD deals were inked): “The economy and especially the semiconductor industry continued to be soft during most of the Company’s third quarter, due to oversupply of raw materials and reduced customer infrastructure investment. Since the close of our third quarter on January 31, 2013 we have seen an increase in pricing which can positively impact our memory business for the balance of the fiscal year and beyond.”
Mr. Freeman concluded, “In addition to a healthier semiconductor industry, we continue to develop and expand our relationship with Advanced Micro Devices, Inc., which together with our RAMDisk agreement and other new opportunities we are currently pursuing should provide new sources of revenue, profit and growth for Dataram in 2013 and beyond.
Record 4Q and FY earnings will be reported in 2 weeks and will not include revenues from the AMD deals which were announced after the fiscal year was over. This should tell you that subsequent quarters will be even stronger and more profitable. Since they will report the 4th quarter and FY earnings this time, the next quarter earnings release will come out only 6 weeks (early September) after the 4Q results are announced