Jules: Thanks for this excellent analysis. I too strongly believe in buying opportunities created in the final days of a quarter by pre-alerts of shortfalls. Seems insidious that the street whacks many stocks on the bad news of the few, but knowing it helps the small investor beat the street. The next group whack opportunity of course comes during the early weeks of the quarter as earnings get announced. By then the earnings are well dialed in and few surprises happen. The real momentum swinger is the conference call guidance the company provides immediately following their earnings announcement. For example, if Intel takes that opportunity to say Q3 and the balance of the year will be flat to down, then every stock gets whacked - across the board, and rightly so. At the other extreme Intel could offer guidance that they see the strongest growth ever on the immediate horizon - and every semiconductor and PC related stock would quickly skyrocket. If they are more predictable, then they will offer cautious optimism, assure the analysts that their Q3 and 1996 consensus of $1.14 and $4.48 are "in- line", and the sky will not fall. Now, what about the likes of Lattice or Quantum. When they deliver their earnings they will likely be exactly at the level they alerted the street to this month. If they go on to say in their conference calls that Q3 will continue to suck and that the whole market is unraveling for them, then expect a group whack, again not warranted per se, but predictable. I personally believe that the July conference calls for semi vendors will in general be optimistic about the balance of the yr, and provide the assurance Wall Street needs to lay off the sector for a while.
-tt |
