Disk-drive group hits 4-month high
By Debra McGarry, CBS.MarketWatch.com
Last Update: 1:49 PM ET Aug 24, 2000 NewsWatch
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NEW YORK (CBS.MW) -- Disk-drive stocks soared 10 percent Thursday, propelling the sector to its highest level in four months, as Read-Rite hit a customer "grand slam" with four major customers placing orders for its GMR recording heads.
The Amex Disk Drive Index (DDX: news, msgs) leaped 10 percent, with Read-Rite's 27 percent gain setting the pace.
Read-Rite (RDRT: news, msgs) moved up by 1 1/2 to stand at 7 1/8 in recent action. Shares of the Fremont, Calif.-based maker of magnetic recording heads for disk drives had climbed to a 52-week high in morning trading.
The disk-drive index posted solid gains last week on investor optimism that the sector may be ready to return to profitability in the fourth quarter, and Read-Rite's announcement only added to the optimism.
Harnessing GMR
Read-Rite said that it has already begun shipping giant magnetoresistive, or GMR, recording heads to Western Digital (WDC: news, msgs), Quantum-Hard Disk Drive (HDD: news, msgs), Samsung Corp., and Maxtor (MXTR: news, msgs).
The announcement represents "a significant turning point for the company's return to profitability goal," said Alan Lowe, Read-Rite's president and chief executive officer, in a press release. See full story.
GMR is a phenomenon involving large changes in electrical resistance that occur in specific materials sandwiched in very thin layers of metals, according to Read-Rite. GMR recording heads are more sensitive and hence are capable of storing more data per disk.
Read-Rite's customers also saw their shares head higher. Western Digital advanced 5/16, or 6.3 percent, to 5 1/4; Maxtor edged up 9/32 to 7 7/16; and Quantum shares rose 1/8 to 9 1/8. |
