Caught this on the Yahoo RDRT thread. Said it was from 11/29.
Chase H&Q analyst Bill Lewis said the depressed stocks "represent an
historic buying opportunity for people in the quality stocks in the industry
... Even though PC demand is weak, there are not enough disk drives
available to meet demand."
According to Lewis, a shortage of semiconductor components has prevented
disk drive companies from manufacturing drives, thus keeping inventories at
low levels.
James Corridore, an analyst at Standard & Poor's, argued that component
shortages are hurting the disk drive sector by forcing companies to stop
and start production based on when components are available. This halting
process makes companies run overtime, Corridore said, and keeps products
from going out the door quickly and efficiently.
Corridore sees the sector facing tough fourth quarter earnings results.
"If a company goes above expectations, I think they should be rewarded,"
Corridore said.
Lewis, on the other hand, sees the sector having a good fourth quarter.
"We're seeing prices go up (for disk drives) and we're going to see
outperformance" in fourth quarter earnings, Lewis said. He sees Maxtor Corp.
(MXTR) and Read-Rite Corp. (RDRT), which makes magnetic recording heads,
beating expectations. |
