Posted today in Story Stocks:
We would be surprised if the following do not warn soon: PMC-Sierra (PMCS 34.68 -4.00), Applied Micro (AMCC 19.25 -1.75), Conexant (CNXT 9.76 -0.81), RF Micro (RFMD 27.91 -2.50), LSI.
Comm IC Stocks: The communication chip stocks are getting crushed today. A lot of news out on the group. Going against the grain is Prudential as it upgrades Altera (ALTR 27.59 -1.44), Lattice (LSCC 24.93 -0.97), LSI Logic (LSI 22.25 -0.51) and others to BUY from Hold. The firm expects a 50% return on each over the next 12-24 months. Transwitch (TXCC 12.16 -2.70) came out and warned big time after the bell yesterday. It appears this magical bottom is becoming more elusive especially for the communication chip stocks. SG Cowen does not expect business to ramp up again for TXCC until mid-2002. Also, Intel made some bearish comments on its mid-quarter call last night as they said there are not calling a bottom in the communication business right now, nor did they forecast when that might happen. In fact, they even said flash (which has been a true laggard) would improve before communication. Ouch. Briefing.com recommends that investors hold off on going bottom fishing on the comm IC space as we are likely to see adverse news flow out of sector during the next six weeks. The following have already warned: LSCC, TXCC, BRCM, CY, ALTR. We would be surprised if the following do not warn soon: PMC-Sierra (PMCS 34.68 -4.00), Applied Micro (AMCC 19.25 -1.75), Conexant (CNXT 9.76 -0.81), RF Micro (RFMD 27.91 -2.50), LSI. It was not long ago that analysts were predicting a bottom in the second half, but Q1 or Q2 next year is now looking more realistic. Also, these stocks are still well off their lows -- look at the charts. If you have made a nice profit on the change in psychology over the past two months, it makes sense to sell into strength as the fundamentals have not improved. -- Robert J. Reid, Briefing.com |
