ANCR -- imho caution may be in order (following is from TheStreet.com, copyrights apply, except under fair use provisions):
Commentary : Herb on TheStreet
Ancor and the
Dangerous Games
Investors Are Playing
By Herb Greenberg
Senior Columnist
11/12/99 6:30 AM ET
Fried-Day:
Last year revisited: It feels
so much like a year ago, when companies like
Pillowtex (PTX:NYSE), CHS Electronics
(HS:NYSE), Safeskin (SFSK:Nasdaq) and others
were on fire and could do no wrong. Any question
regarding the soundness of their biz would cause
the Hostile React-O-Meter to spin out of control.
Those names can now be replaced by the likes of
Cree Research (CREE:Nasdaq), IDT
(IDTC:Nasdaq) and Ancor Communications
(ANCR:Nasdaq), where investors confuse
momentum with fundamentals.
Ancor, a maker of fiber channel switches, is -- or
until late yesterday -- was on fire. (Swinging from its
open at 60 to 73 3/8, before closing at 54 7/8.) All
sorts of message board chatter. All sorts of rumors.
All kinds of stories, most of them surrounding the
hype and hoopla that sales of switches to Sun
Microsystems (SUNW:Nasdaq) will begin showing
up this quarter. (Don't get me started on the danger
of the boards!)
According to those rumors, at Comdex next week,
Sun supposedly would roll out a new StorEdge
product bearing the Ancor switch. However, before
Dow Jones broke a story saying pretty much the
same thing, a Sun spokeswoman late Thursday told
my sidekick, Mark Martinez, that there will be "no"
announcement regarding StorEdge and Ancor at
Comdex. Furthermore, she said there would be no
announcement regarding StorEdge and Ancor in the
current, fourth fiscal quarter.
That prompted Martinez to ask: "Does that mean it
may not be ready until Q2?" She said she wouldn't
rule that out, but felt that there was no reason not to
think that it would be sometime in the first quarter of
next year.
Ancor Prez Cal Nelson, meanwhile, told Martinez
that Ancor expects a "good quarter independent of
the Sun relationship." He added, "And we expect to
have a respectable quarter even if we don't have the
Sun revenue." (That's what he said, really.) This is
very important because analysts had been telling
their clients to expect the Sun business to begin
ramping up in the fourth quarter. That was based on
comments by the company itself in its last earnings
release.
Meanwhile, another
rumor (perpetuated by
the message boards) is
that Ancor is close to
an OEM deal with
Hewlett-Packard (HWP:NYSE). But, yesterday
Dain Rauscher Wessels analyst Tom Erickson
came out and said that it seemed doubtful Ancor
would win the biz: "Although there has not been a
public announcement of which SAN switch vendor
has won the OEM relationship at Hewlett-Packard,
we do not believe that Ancor, a Brocade
(BRCD:Nasdaq) competitor, will be selected,"
Erickson said. Dain Rauscher Wessels was an
underwriter for Brocade's IPO earlier this year.
Erickson rates Brocade a strong buy and doesn't
cover Ancor. |
