Meanwhile AFLX estimates are going up.
The consensus for this year is up to 88 cents and next year up to $1.57. AFLX is trading about 16-17 times next year's earnings having run up over 40% over the last week. I must admit, the market correctly forecasted AFLX's earnings rebound, and SFLX's earnings drop. In December/January, analysts had SFLX pegged for $1.40 this year and about $1.80 next year. But the stock market price action said no way. Since then earnings estimates have come way down. Hopefully we are approaching the bottom.
A technical question: One thing I've learned recently, is there are several types of hard drives. The IDE drives don't contain the kind of assemblies that SFLX makes, but the higher end SCSI drives do. According to some posts on the Disk Drive Discussion Forum thread, originally many people didn't believe the lower cost IDE drives could store enough data, or retrieve it fast enough to compete with the more expensive SCSI ddrives. But now there are 4.3gig IDE drives out there, that have multiple platters and seem to be grabbing the lowest price per gig. Of course they are slower than the SCSI drives, but they only cost about 40% as much for the same storage. I'm wondering if this is putting margin pressures on SFLX's low end assemblies.
The question: Will the IDE drives eventually hit a limit in terms of storage capacity and speed such that some of this market will recaptured by SCSI units? Or are advances in drive design, media, heads, etc. going to keep the IDE drives eating into territory once controlled by SCSI drives?
If I can get a layman's answer to this, I'd appreciate it.
Adflex OTOH, seems to be moving more quickly into other flex markets, and this seems to be driving their revenue growth. The Seagate problem probably hit them as hard as SFLX, but they had the growth in these other markets to support them.
The Drive Discussion Forum is at:
techstocks.com
Fianlly, John McManus does good analyses, but has a terrible timing record on his picks. His favorite stock for this year was Centennial Technologies. He was the only analyst in this sector who recommended CTN as a strong buy right through the obviously fraudulent earnings report until the CEO was fired and arrested. On DIIG he had it as a buy at 39 in Dec/Jan of 96 and as a hold in the low 20s in Jan/Feb of this year; it closed Friday at 56 and change. His downgraded earnings estimate is good news as far as I'm concerned.
Paul |
