From Briefing.com
Here's their take before earnings were announced.
14:57 ET ******
PMC-Sierra (PMCS) 68 +2 1/16: Stock has been riding the bandwidth wave, as company's high-performance
semiconductor networking solutions are used in the high speed transmission and networking systems of the
global telecommunications and data communications infrastructure... Top and bottom line growth has been
tremendous, resulting in a very handsome chart configuration... Stock up 47% since June 1, and 115%
year-to-date... Given such tremendous gains, and the "sell-on-the-fact" tendancies of this market, investors
have to be wondering just how good tonight's results need to be in order for the stock to sustain today's
advance over the near-term... PMCS expected to post a gain of $0.19 v. year-ago profit of $0.14... Company
has typically met, or beaten estimates by one to two cents... Problem with this is that whisper number is
$0.21... In other words, company will have to do better than normal just to satisfy optimistic expectations...
Over past three quarters revenues have grown by an average of 47% (yr/yr)... Consequently, market will be
disappointed if revenues come in under $73 mln... Unfortunately, such lofty expectations could also prove
troublesome for the stock over the near-term, as Q2 historically one of the most difficult for the company
(seasonal factors)... Negative tone of this report not meant to dimish company's tremendous growth prospects
or respected management team... But after watching Vitesse (VTSS), Apple (AAPL), Yahoo! (YHOO), Boeing
(BA), Alcoa (AA), General Electric (GE) all sell-off after very strong earnings numbers, we aren't hopeful that
this high-flyer will buck the "sell the news" trend... Especially considering that PMCS trades within a few
points of its all-time high, sports a p/s ratio of 25-to-1 and an estimated p/e multiple of 89x... So if you're long,
Briefing.com contends that now might be a good time to take profits... You can always (re) enter in a few
days after the stock experiences its post-earnings blues... Initial support is in the 60-58 area. -- RW |
