Presstek, Inc. (NASDAQ:PRST)
The Company is a manufacturer and marketer of high tech digital imaging solutions for the graphic arts and laser imaging markets.
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high tech is the way of the future.
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having worked in the digital imagining oem sector i find the long term for presstek desirable but short term i believe they will underperform. Presstek's new managament team has done a good job at cutting cost and eliminating debt. But their mainstay revenue is the sale of consumables. the Equipment side of the business has showed a drastic decrease in orders and have consequently miinimize the manufacturing business. In general the the industry is in contraction this in conjuction with the global ecomonic turndow and credit crises put Presstek at risk for substantially under performing.
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having worked professionally for presstek i found the new managament team woking very well to cut cost and has a strong desire to introduse new technologies for the digital printing industry. It is the general consenous the industry is very volitle and orders for new equipment is severly lacking. Presstek has not been successful introducing new technologies in a timly manner. While presstek does have new product designs (equipment) on the boards they have not been successful in bringing them to market. this in conjuntion with the general contraction in the industry for orders of new equipment and the global credit situation places presstek at high risk for underperforming. Presstek has very low margins on printing equipmnet but does well with the media use in the industry. The printing media is the mainstay of their revenues while presstek continues to struggle in the capitiol equipment segment of their business.
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intresting marget segment...
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This stock is in the capital goods sector of the market and the industry of misc. capital goods. If we look at the charts which we go by we will see that it is well above the 20- and 30-day moving averages and above the 200-day moving average as well. This stocks revenue decreased 4% last year and the net loss from continuing operations totaled $12.2M vs and income of $13M and the revenues reflect a decrease from the service and parts.
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Turnaround play in the printing equipment industry. Just met new management team (industry veterans who ran a related $3Bn business for Kodak) and like what I saw. Lots of opportunities to cut costs and improve revenue growth. New management likely to provide first look at strategy and cost cutting opportunities on their upcoming third quarter call which may be a near term catalyst. Renowned value investor Peter Kellogg has been adding at these levels so at least we’re in good company. Solid model with approximately 50% of revenue from consumables and 30%+ gross margins so 10%+ operating margins should be attainable. If achieved, could be a double in two years I/M/O. CEO Jeff Jacobsen (603) 595-7000
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Printing Industry is rapidly consolidating and new technologies make it a very voaltile market.
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