Well, I suppose so. But, there's a lot of very good company's whose stocks are relatively cheap. I think there are several things taking place simultaneously in the tech market that are combining to drag almost all tech stock down regardless of their longer term prospects. These are the PC slowdown, the telecom crash and the NAZ bubble bursting. The PC slowdown will eventually bottom and sales slowly pick up, however, the market is pretty saturated and there isn't going to be a huge boom. The telecom biz is a wreck as the old telecoms slowly crumble under declining prices for long distance and the new telecoms die under the weight of debt that they can't support and can't add to. This is compounded by a saturated wireless market and huge debt burden among wireless providers. Add to this the general bubble bursting of the NAZ and everybody is down.
So, who comes back? Well, the telecom situation isn't going to get better for quite some time. The "old" telecoms will have to go through a winnowing process of mergers while the "new" telecoms will largely go bankrupt to rid themselves of debt. Until this plays out there isn't going to be a lot of good news for anybody associated with telecom or wireless.
PC related sales won't help until at least the end of this year and it may be sometime next year before there's actually positive news.
I don't know whether or not ADI has a lot of downside left, but, I don't think there's a huge near term upside because of these factors. The company probably has a forward P/E of something like 30. In this kind of market its hard to imagine it ballooning to 50 or 60 and holding on there.
I used to own a lot of ADI, but, I got out when it reached really silly levels. I'm going to buy back in, but, not just yet. |
