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Strategies & Market Trends : Joe Stocks Trader Talk

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To: Joe Stocks who started this subject	2/26/2002 1:23:39 PM
From: Joe Stocks	of 787

SMTC- Reports tonight. Pre-announced meeting earnings. What just struck when I researched them is the amount of debt they have at this phase of the cycle. Many of their peers have very little debt. SMTC has a debt to equity ratio of over 1.0 and are planning on becoming fabless. Just started looking at it. Don't know if I will play the earnings right now but I'm leaning towards a short position based on the good news has already been reported when they pre-announced. Any negatives will now be magnified IMO. Selling at 10x sales and cash appears low as compared to how much cash they have gone through this last year. After a little more looking I think the risk/reward favors a short for earnings. Very risky. May take a small position. Joe

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