The New QLogic (ANCR) Message Board

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Technology Stocks : The New QLogic (ANCR)

QLGC 16.07

0.0%

Aug 24 5:00 PM EST

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To: w2j2 who wrote (29117)	2/25/2003 7:27:14 AM
From: Bob Frasca	Read Replies (2) of 29386

The article was about whether it was safe to invest in technology companies again and warned that, QLGC, despite it's stellar earnings, flawless balance sheet, and outstanding margins might be risky because of the idiotic things that Kumar the yammerhead cited. (Imagine, a technology company with competitors and threats from a new generation of technology!) Specifically, he cited the HBA business as a "duoply" with Emulex and apparently thinks that the iScsi business (though not mentioned by name) will be dominated by Intel and Broadcom (I'm not sure why he mentioned Broadcom. Their acquisition of Gadzoox does not position them in that market.) and he also mentioned the rumor that Fujitsu will sell their HDD business. He went on to say that 2004 will be the peak earnings year for Qlogic. The article also had quotes from H.K. stating that he thought that the adoption of new technology would be far slower than Kumar is predicting and said that even if they lost the Fujitsu business it would only amount to about 8% of revenue because business would increase elsewhere. The conclusion of the article was that it wasn't safe to invest in any technology company with a PE higher than the 15 average of the S&P 500. Personally, I hate articles that attempt to paint everyone with the same broad brush. His conclusions do not take into account that certain sectors are always rewarded higher multiples for a complex set of reasons. That's why it's an average of all 500 companies. The storage sector is growing much faster, with far better margins, than many of the other companies in that index. I will try and post that article when I get to work and can get to my subscription. (I can't remember my username and password.)

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