Wittington tries to explain his reversal. 8)
Technology News
Tue, 19 Sep 2000, 10:59pm EDT
Banc of America's Whittington `Regrets' AMD Cut: Call of Day
By Chelsea Emery
New York, Sept. 19 (Bloomberg) -- Richard Whittington, a Banc of America Securities analyst, says he ``regretted'' lowering his rating on chipmaker Advanced Micro Devices Inc. last week.
Intel Corp. gave him the chance to make amends.
On Wednesday, Whittington cut AMD and Intel to ``market perform'' from ``strong buy,'' citing lower-than-expected demand for personal computers and Intel's likely inability to meet demand for its chips.
The semiconductor analyst said he'd gone too far with his downgrade on AMD, so when industry data showed him Intel was likely to meet customer demand after all, he used the opportunity to upgrade AMD, too.
``I try not to change ratings very precipitously without serious justification,'' he said in an interview. ``I regretted it and used this as an opportunity to raise my rating back'' to ``buy'' from ``market perform.''
It's been about nine years since he's changed his mind in so little time, Whittington said. He said he couldn't give any past examples.
Shares plunged after the analyst downgraded Intel and AMD last week. Intel sank 14 percent through yesterday while AMD sank 13 percent.
Those declines, plus indications that price fluctuations in DRAM chips may have ended, spurred Whittington to change his rating today.
``It's been only a week, but there are indications that Intel is supporting its customers and that the DRAM market may be stabilizing,'' Whittington said. He wasn't more specific.
Still, he said, Intel's decline was the biggest impetus to his ratings change.
``The stocks have gone down, Intel especially, more than I would've expected,'' Whittington said. ``I certainly wouldn't have re-recommended Intel if the price hadn't dropped,'' he said, using the opportunity to raise AMD, too.
Big Gains
Investors heeded today's report, too. Intel jumped 3.38 to 59.13, its biggest gain since June 19, and Advanced Micro climbed 2.94 to 29.44. The Intel upgrade helped spark the Nasdaq Composite Index's biggest rally since June 2.
Whittington's past calls have made money for some investors. Micron Technology Inc. has nearly doubled since he raised his recommendation on shares of the maker of computer-memory chips to ``strong buy'' from ``market perform'' in February.
International Rectifier Corp. has more than tripled since he raised his rating to ``strong buy'' from ``buy'' in August 1999.
In contrast, Genesis Microchip Inc. has slumped 23 percent since the analyst lowered his rating on the stock in December.
Whittington received a master's degree in public administration from Harvard University's John F. Kennedy School of Government in 1978. He's followed semiconductors for 13 years for various firms, with a two-year break to manage his own money as a private investor. He joined Banc of America Securities in June 1999.
Some investors said Whittington's rapid shift is a sign of a trend in analyst coverage.
It indicates ``how the analysis process has become more market sensitive and less research and judgment sensitive,'' said Douglas Altabef, chief investment officer of Matrix Asset Advisors Inc. ``People are more short term in their focus, and we have analysts playing to that reality.''
Whittington, who follows about 30 semiconductor-related companies for Banc of America, said he disagreed.
``I violated my own rule book,'' he said. ``My job is not to induce volatility, but to offer the best advice.'' |
