Eric,
Re: PMCS - "Modified" LTB&H Strategy (Jubak Article)
<< my opinion on PMC-Sierra >>
I am most appreciative of your sharing that most informed opinion.
At least in a general sense, it confirms what I think I know about PMCS.
It totally agree with your comments on ATM ... "everyone's looking at 10-gigabit ethernet to be a major threat to fibre channel. However, it seems to me that the technology 10-gigabit ethernet will be most detrimental to is ATM"
For this reason the recent introduction of their S/UNI-2xGE (which will sample in November) and is purportedly the "Industry's First Dual Port Gigabit Ethernet Chip With POS-PHY Level 3 Interface" is potentially important:
newstream.com
PMCS seems well positioned in what is delivering to the indudtry now, and what will deliver in the future. I have not noticed many miscues.
Lehman Bros (A. Chanda) raised their earnings estimates on PMCS this morning and commented:
"We believe that PMC-Sierra is the franchise name in the communications IC space with a leadership position in core wireline semiconductors. The company has the highest gross margin in the communications IC market and in spite of its size is posting triple-digit growth rates consistently."
PMCS (and SNDK) are the only stocks I hold that are not a certifiable Gorilla, a King, or a strong potential Gorilla, so I hold it in small proportion to the rest of my portfolio (3.5% today), and I hold it lightly.
I have forgotten a lot of what I once thought I knew about ATM, SONET, Gigabit Ethernet, 10-Gigabit Ethernet, so holding PMCS gives me a chance to follow (once again) what is developing in comm IC's, and where (and when) 10-Gigabit Ethernet is headed.
In the interim, since I have started to follow PMCS (late 98), they seem to be just executing superbly, and if they can integrate their recent acquisitions successfully, should remain a player for the foreseeable future.
Jubak has a very interesting article this morning called "A Pain-Killing Strategy For Buy-And-Hold Investors" that might be of interest to readers of this thread:
moneycentral.msn.com
As it relates to PMCS (and some other stocks we discuss here), Jubak offers this:
"Even in the technology sector, stocks such as Cisco Systems (CSCO), Applied Materials (AMAT, Texas Instruments (TXN), Nokia (NOK), EMC Corp. (EMC)) and Oracle (ORCL) will recover. These stocks are likely to be great investments in the long run, and the last thing you want to do is sell them now."
<snip>
From the more aggressive Future Fantastic 50 portfolio, there are certainly good reasons to let the current 10 picks ride. America Online (AOL), Applied Materials, Charles Schwab (SCH), E*Trade Group (EGRP), Excite@Home (ATHM), JDS Uniphase (JDSU), Metromedia Fiber Network (MFNX), Nokia , RF Micro Devices (RFMD), and Yahoo! (YHOO) certainly haven’t gone up in price over the last month. But I think a few stocks from the portfolio are even better bargains right now and might only be fleetingly so. So I’m dropping Charles Schwab and At Home in favor of EMC and PMC-Sierra (PMCS).
Thanks again for your comments.
- Eric - |
