Syntax-Brillian: The Future Should Be Clear

So the future wasn't as crystal clear as I predicted back in June. Fast forward to September and we see that Syntax-Brillian (BRLC) continues to grow, has made some mis-steps, has seen two profitable quarters in a row, and let go of its CFO.

What most investors do not realize is that building a company is not as easy a task as one might think, especially when it grows over 270% over one year's time. On top of that, if your CFO has no interest in the future of the company, it makes it even harder.

Now that there is a new CFO, and the old one is off to supposedly help another start-up, this company still has legs, and a high quality product. The CEO has realized that focusing on domestic growth rather than Asia is a good thing and this should help cash flow.

Back in May, the company gave revenue guidance for the June quarter between $190 million and $210 million and calendar year 07 revenue between $950 million and $1.1 billion. In July, the outgoing CFO miscalculated a revised upward guidance for the calendar year to $1.1 billion to $1.3 billion. It's my belief that the CFO used the excuse of the credit crunch as the reason.

September 12th the company reported quarterly revenue of $205 million, at the higher end of the predicted range, and net income of 11 cents per share. Because of their credit issues in Asia, they revised their calendar year 07 guidance back to what was predicted in May. So….we could say that the stock should have sold off maybe 15% because of the CFO's miscalculations, but 45% is a little much.

Let the shorts, who have been talking like this company is doomed, go elsewhere and let the long term stock holders, like myself, handle this one. This stock is highly undervalued at a P/E of 8, and the risk of Asian credit, predicted LCD supply issues, ability to manufacture enough product for the holiday season, and limited working capital is more than built into the share price.

Disclosure: Author has a long position in BRLC

Comments

[Roach:]

Nice article. Hopefully the shorts have all left. Realistically, I could see this stock going up to $8-9

2007 Sep 25 07:39 AM

[Rocketrade:]

CEO SPEAKS!!

www.wallst.net/audio/a...

2007 Sep 26 01:16 AM