There are lots of things going on. There are opportunistic shorts that would love to spook people a little bit and create a great trade.
However, just because a stock has declined from higher levels doesn't make this a wild buying opportunity. PMCS is still well over 60 times 2000 estimates. While a fair price in a bull market for a great company, it is by no definition cheap.
I would guess PMCS has a decent inventory of finished wafers and q3 products should be well past the wafer stage at this point any how.
If taiwan can be back on line within two weeks, this will be irrelevant. Even if q4 is moderately disrupted, that will lead to a solid q1 instead.
The risk is a risk of unknown production problems and uncertainty extending for a period of time. I think this is a tiny risk. But if uncertainty extends for a while, the stock will be unpleasant for those with a short term perspective.
Per the "yahoo" post, the chances of pmcs opportunistically raising prices are nil. That is not the way the company operates. Unlike most investors these days (I exclude many of the folks on this thread since they've been around a long time), the company is in business for the long haul and would never take advantage of customers like that.
If the problems are more serious than we think at this point, could we see a much more significant decline? Yes.
If the problems work themselves out, is it a buying opportunity? Probably, but only if the current positive market conditions hold. Is PMCS still a great company positioned to do really well over the longer term? Yes, in our opinion.
TD |
