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Taking Stock: 'Geek's gamble' could be worth a bet

Malcolm Berko: Considering the low insectile hum that seems to derive from its San Jose, Calif., executive offices, I think OCZ's best chance for help is Orkin. Still, this may be a geek's good gamble, so consider putting $6,000 on this pony.
By Malcolm Berko Modified: February 1, 2013 at 6:43 pm •  Published: February 3, 2013
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I keep a few Fidelity mutual funds in my recommendation bag, but I don't know enough about your circumstances to determine whether they would be suitable for your goals. If you can find a competent and trustable adviser, please hire him.

OCZ Technology Group (OCZ-$2) has built on its expertise in high-speed memory to become a dominant player in the manufacturing and distribution of solid-state drives, a game-changing technology that's replacing traditional magnetic hard disk drives. Solid-state drives are faster, are more reliable, run cooler and use significantly less power than hard disk drives, which are used in most computers today. OCZ's revenues have grown like wildflowers, from $20 million in 2004 to more than $400 million last year, so it's doing something right.

Well, let's see! OCZ earned 4 cents a share in 2006, 2 cents in 2007 and 7 cents in 2008. But during the past four years, OCZ has lost more than $71 million.

OCZ has a book value of $3.87, about 70 cents in cash per share and zero debt. But OCZ has a negative cash flow of $122 million and a return on equity of minus 7.7 percent, and the stock price has melted from $10 in February 2012 to a low of $1.11 last November. Someone should take over this company.

However, I'm not even sure Waste Management (WM-$35) would buy OCZ. Considering the low insectile hum that seems to derive from its San Jose, Calif., executive offices, I think OCZ's best chance for help is Orkin or Truly Nolen. Still, this may be a geek's good gamble, so consider putting $6,000 on this pony.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com.