Is Syntax-Brillian a Bargain?

This article is now exclusive for PRO subscribers.

The recent drop in Syntax Brillian (BRLC) stock may have been a rush to judgment. The critics of the company have cited problems with obtaining financing, difficulty in obtaining LCD panels and cash problems. These problems may well have been overblown. The company currently has $450,000,000 million dollars in working capital from its' supply chain partners. It has also discovered a means to finance its account receivables in China, which will allow it to receive revenue from sales without waiting 120 days to collect from customers. Furthermore, company Chairman Vincent Sollito has confirmed that several financial institutions have contacted them offering additional financing. The company has also been using all available cash to funds its rapid growth. As Sollito recently pointed out, it makes no sense to keep money in the bank when it can be producing a greater return on your money expanding revenue.

After checking industry sources, it appears reports of a shortage of LCD panels have been greatly exaggerated. This seems to confirm Sollitto's statement that his company has had no difficulty in obtaining LCD's.

Industry reports also show the demand for HDTV's will continue to grow at an accelerated pace for many years to come. Reviews for the Syntax Brillians' products have been outstanding and the company has stated that demand is so strong that it cannot be met. The company expects to grow revenues 250% per year for the next several years and it appears this may well be the case even with a few bumps in the road.

While this company has experienced some growing pains it appears this stock may well be poised in the near future to rise dramatically, especially in light of the large short position in the stock which was recently approaching 40% . Continued good earnings news and the company's share price could in the not to distant future reach some analysts projected price of $15.00.

Disclosure: Author has a long position in BRLC