Here are some comments from this mornings's CFSB Tech Daily regarding Comm IC space. Two out of 3 of their tops picks is not a bad track record for me.....LOL
____________
Communications Ics Earnings Preview
· 4Q00 was not the seasonally strong qtr it was hoped to be, but for many comm-IC companies,this is historically a weaker qtr than 2Q or 3Q. However, a decline in PC, wireless, and wireline access should mean that even good companies will probably only hit guidance.
· More importantly, limited visibility across the group, caused by weaker demand and an accompanying inventory overhang, is now coupled with Reg FD caution. Consequently, we expect cautious guidance for wireline and wireless, and outright negative guidance for PC growth in 1H01.
· We have the highest confidence in AMCC ($63 ¼), TXCC ($30 ¼), and CTLM ($16 5/8) that they will beat estimates and modestly raise guidance. RFMD ($22 5/8) and CUBE ($10 13/16) should beat numbers but remain cautious on outlook. Companies hitting numbers and leaving guidance alone should include: BRCM ($97), PMCS ($68 15/16), and VTSS $47 11/16). Several companies have already pre-announced including: DS, INTC, VRTA, and SIMG. We expect INTC ($32 ¼) and TI ($117 ½) to slightly miss 4Q (mild negative Q/Q growth) and lower guidance, especially for 1Q. We are restricted on CNXT, and GALT was bought by MRVL.
· We believe that AMCC will lead off the group on Jan. 16 with both upside to earnings and guidance. However, for other companies in the comm-IC space, we would be more aggressive after the companies clarify guidance (notably TXN, PMCS, and VTSS).
Again, as we’ve stated since September, we are buyers in quality comm-IC stocks provided investors have a 6 month horizon and expect results in line with explicit company guidance for 1H01. For PC companies, we would remain on
the sidelines. |
