Kevin,
<< You can't say RDRT is in serious trouble without backing it up with numbers. If you wanted to say the the stock price looks in trouble the last week or even year I would agree. To say RDRT is in serious trouble now is just slamming the company for no real reason.>>
If by "numbers" you mean estimated earnings, I can, did, and do. That I feel inadequate to estimate RDRT's earnings isn't an indication that my opinions on RDRT as an investment are any less valid. I don't see any logic to suggest that. Try to capture in your mind what it means for a company to surprise the analysts by turning in 99% less earnings then was predicted. It suggest very poor investor guidance from the company. Do you really want to reward a company like that with your hard earned investment dollars? Hope your kids are extra smart or extra athletic.
You asked for "numbers" so let me point out that I did offer some numbers in my last post. That RDRT has under performed the industry as a group by a spread of 22% as of two weeks ago (it was down another 8.84% today, in an up day for the group, further widening this gap) is a pretty strong indication of a reasonable concern about this company's stock as an investment vehicle.
Looking forward isn't too exciting either. First call estimate mean for the FY ending September is for RDRT to lose .78 per share. Lets say they surprise by only 10% and lose .86 per share. Does that mean you are going to increase your investment in them? That isn't too far fetched IMO. RDRT has yet to qualify on a 2.8 GB per platter program as far as I know. They lag way behind their competition in the MR transition. (IBM, SAE-TDK, and Yamaha have all qualified MR heads for programs at or near this recording density). Then you have the general trend towards less components in the disk drive. This trend is discussed in Trend Focus Inc.'s latest research as well as Peripheral Research Corp.'s latest research.
Now we have the IBM/WDC announcement. Here is an opinion that came out today while RDRT tanked another 8.84%.
(The following quotes are extracted from a research report by Morgan-Stanley and are reproduced here for personal consumption only:)
- " IBM ($118) and WDC have agreed to share GMR recording head, electronics, design, and volume manufacturing skills. WDC is to have simultaneous access to IBM technology with IBM's own desktop teams (currently IBM is apparently 6 months ahead of the industry on the desktop)."
And "Strategically, this agreement will likely impact a number of other
players in the industry. Recording head manufacturers with WDC
exposure (RDRT and APM) will likely be hardest hurt."
And "- In the OEM RECORDING HEAD BUSINESS, IBM appears to be moving to a more aggressive stance as a supplier: In other words, IBM continues to have the best technology on the market and wants to gain significant volume in OEM recording heads and therefore capture higher gross profit on these products than manufacturing high-volume disk drives itself."
And "- We believe that this could have a negative impact on recording heads players who have traditionally be big WDC suppliers such as Read- Rite (RDRT, $12, Neutral) and Applied Magnetics (APM, $9, Neutral)."
Kevin, until you post something of substance that refutes my bearish position on RDRT you really don't have much of a chance of persuading me that I am mistaken regardless of your sophomoric "LOLs". Once again I will mention that I have read your previous posts and find no substance at all. Frankly I do not care if you put your money in a blender. Your comments don't discourage me from sharing opinions and information on investments, both of which I get in return by participating in these threads. It is possible others may find
these posts more helpful then you do.
Best,
Stitch |
