Rimage Corp (RIMG)

expert

A solid company with a low PE compared to their usual .

This company though financially solid, has an incredibly uncertain future. The whole playing field is changing dramatically. They serve a very high end market, where the numbers suggest saturation is upon them. They continue to be vague about new product opportunities. I believe on-demand will completely replace physical media distribution in the next 5-10 years. bandwith problems will be solved. This shifts the physical storage to centralized servers. Sure, there is business there, but at what growth rate?

watch it

when plus

Looks like Company is making moves to improve global market share and products. Price hit hard by bad quarter but may rebound in the coming year.

I need to check this site more often, I cashed out around $33/share.

Rimage Corporation established in 1978 has emerged as a market leader in the field of developing and manufacturing publishing, duplication and printing equipment in the field of digital media.

Sales of digital discs duplication equipment used to contribute as high as 70% of revenue during 2003, but have come down to 54% for the nine-month period ended September 2006. During this time-period recurring revenue contribution, which consists of consumables like ink cartridges, ribbons and maintenance increased. This change in the nature of revenue contribution led to a moderate 2% increase in revenue during the same period as the profit margin from recurring revenue segment is low.

The market is slowly shifting from the U.S and Europe to emerging areas like Asia and South America. In response, the international sales remained static at 33% during the same period and the previous nine-month period ended September 2005. More products are in the anvil, but competition from fellow players like Primera technologies and Microtech system has been increasing.

The shrinking of hardware sales revenue sounds like an alarm for the company. With the demand from emerging markets looking to explode the company seems to be lagging behind. The leadership position that it had in its traditional markets of Europe and the U.S also has been undermined, as seen from the dip in hardware sales. The service segment revenue, which is currently propping up the sales cannot do so for long as the profit margins are too thin and the competition is intense. These internal factors put the company at a disadvantage and it is going to affect the stock price movements in a negative manner.

Good balance sheet. Making good money.

Screen of 5-star picks by top 60 CAPS players with
<30 ttm P/E
<30 forward P/E
>10% Profit margin
>5% ROA
> 2 current ratio

5-star $240 million market cap on 11/24/06.
CD/DVD publishing and duplicating equipment.
5STARsmallCAPS picks five star stocks with the smallest market caps.

yet to be fully understood by investment community . great balance sheet

Niche market with constantly changing media requirements. This will turn around nicely.

earnings out soon looking for profit-higher risk

Boring company,understandable business, management is playing for longer term,makes money, growing profit faster than sales, excellent management

Long Term this will be an outstanding stock to own. Short term, it had a run up. Unless there is compelling news, it is going to at best stay steady for a while.

announcement in the future about new customer applications will move this investment from minors to big leagues