Hi Robert. Hope you're enjoying the weekend.
Nice going on BIPL. Hit new 52 week high and chart has a nice cup and handle.
CHS delisting is not too much concern for long time holders still waiting for a takeover. When the sector begins to climb out of the cellar, consolidation will come into play. Until then, makes no difference where CHS is listed, but you're right....very sad.
Looking for more upside on WDC. (Also bought HMTT). While Sept. has been a horrible month for most stocks, disk drive stocks have been hot. The Amex Disk Drive Index shows a trend reversal took place, illustraded by the MA crossover:
207.61.23.98
I've been watching the money flowing into WDC. Who are the buyers? Morningstar indicates that among the WDC buyers have been two five star funds:
quicktake.morningstar.com
Evaluating on a risk/reward basis, just in case the earnings dissapoint, supports buying into the sector. Check out this site. Neat stuff.
riskgrades.com
Earnings reports are coming up for the disk drive stocks later this month. There's some uneasiness because these stocks haven't yet proven that their turnaround has gone from story to fact. This uncertainty is reflected in the Chase H&Q C2H-00 Disk Drive & Component Preview reported last week. Excerpts from the report:
<Looking Past a Weak C3Q-00 to a stronger C4Q-00
For the drive vendors expect general softness in desktop demand, C2Q inventory builds and lower pricing to create a challenging scenario to meet C3Q-00 revenue estimates. The industry expected MSFT’s Windows 2000 cycle to drive demand, but adoption has been slower than expected. Believe average price will be down in the low double-digit range sequentially, with only modest unit growth.
Believe this current supply shock represents a phenomenal opportunity for drive vendors to alter the fundamentals in the industry.
Things are looking up at the component level. Longer-term are optimistic that for those players that can survive the next 12 months, the component count decline should flatten around the same time the long-awaited consumer market takes off, creating an environment for outsized growth.
MXTR UPGRADING to BUY from Market Perform,6-monthTarget of $12, Believe MXTR will feel the effects of waning demand for its three and four platter drives. Keeping street low estimates as there is some risk of a miss in the C3Q-00 Q.
HDD UPGRADING to BUY from Market Perform, 6-month Target of $13,
WDC Market Perform, have modest hopes that WDC has gained enough share back at CPQ to perhaps exceed Chase H&Q forecast of 5.7M units. However believe any upside in units will have come at the expense of pricing. Keeping street low estimates as there is some risk of a miss in the C3Q-00 Q.
IVAC Market Perform, believe IVAC actually sold an un-forecasted MDP-200 this Q, IVAC’s upgrades and service business remains strong.
SEG Market Perform, not making any changes to estimates on SEG as the company’s shares no longer trade on drive fundamentals given its pending privatization.
HTCH Market Perform, Pre-announced positive C3Q-00 results in August, as the company’s accounting model now reflects its lower ongoing expense structure. Believe HTCH is benefiting from strong demand for its longer tailed TSA suspensions which could lead to EPS upside.
RDRT Market Perform, Best turnaround story, RDRT is in its best position in two years. Believe the company is sold out for the rest of the year on its 20GB heads. >
...and on another topic....Fidelity Natural Gas fund was rated number 6 YTD by Lipper for overall return and safety.
Sergio |
