PMC-Sierra (PMCS) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : PMC-Sierra (PMCS)

PMCS 11.65

0.0%

Jan 25 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Harry Stein who wrote (3469)	4/26/2000 3:29:00 PM
From: Trader Dave	of 3818

If you take analyst estimates and price projections as anything approaching gospel, you will go bankrupt. The reason for earnings momentum investing is that there is enormous stickiness to analyst estimates. When a company does well estimates tend to be too low and not move higher quickly enough and when companies miss, analysts tend not to cut quickly enough. In addition if the range of estimates for a stock is between $1.00 and $1.15, an analyst can make his or her point by posting estimates at $0.99 or $1.16. There's no real benefit to the analyst of using estimates far outside the range. Of course there are enormous flaws to earnings momentum investing. PMCS cut guidance in the summer of 1998 since demand was so high for the company's product designs they elected to significantly increase R&D spending on a go forward basis. They told the street that the increased R&D MIGHT pressure the bottom line for a quarter. Made for a nice summer buying opportunity way back when. This R&D spending increase has lead to an "acceptable" increase in the number of DESIGN WINS and made anyone with any hint of a long term perspective a pretty happy camper. TD

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next