On Thursday we attended an investor presentation in Paris given by the CFO of Logitech (NASDAQ:LOGI). There were a few things that struck us as a definite downtick from the last time we saw them present, on December 5th in London.
Part of it is just the borderline arrogance that comes from a good record of success. They highlight their selection as one of the “ten best stocks in the world” by Motley Fool and that they keep “good company” with the likes of Google (NASDAQ:GOOG), Apple (NASDAQ:AAPL) and so on. (Microsoft (NASDAQ:MSFT), by the way, has been left off the list.)
We have liked Logitech for some time and even had a long position off and on (we have no position now) but when presentations get highly general without any specifics we get worried.
Furthermore, we continue to have concerns over the company’s ability to gain more traction outside of their traditional stronghold of mice and keyboards for Windows. (Most Apple stores we visit have far more Belkin and other brands in place than Logitech.)
The final point is a subtle one. Yesterday the CFO made greater than usual use of the phrase “we are neither changing nor reaffirming guidance at this time.” It’s not by nature a red light, but hearing it four times during a 25 minute presentation when we get few specifics makes us a little nervous.
Logitech has some great assets including their database of protocols to unify the myriad devices in consumer electronics (the universal remote is probably *not* the answer in our view.)
While we do not have enough specifics to go short the stock, we feel warned off from buying it. If we were long, we would probably sell and revisit the story later this year going into a seasonally stronger time.
LOGI 1-yr chart:
Disclosure: Author has no position in LOGI.