OK Sparky, you "sparked" by curiousity as to exactly what was reported. I went back and looked at the articles. They were in the Dallas Morning News, New York Times, Denver Post, Fort Worth Star Telegram, a few trade magazines, and some commentator on the Nightly Business Report also mentioned Merrill's Kurlak and his outlook. Here's what he supposedly is saying:
Kurlak sees slowing chip sales in 1998, and expects to see the industry growth in general slow next year. Industry momentum is aggravated by a "chronic industry oversupply" of components and capacity according to the man, which will mean lower unit prices, and possibly severe price competition. He expects semiconductor companies to cut their capital spending in response to the slowdown (hence lower equipment orders).
That said, Kurlak says he takes a "trading approach" to semiconductor stocks, therefore argues that investors should take advantage of the strong 4th quarter to sell their shares before the slowdown is evident.
Also, in almost all the articles other analysts were quoted who tended to disagree with Kurlak's analysis - sometimes diametrically so. And they made a convincing case.
That said, after reading all the articles, if you are a trader and put stock in what this guy says maybe you should lighten up on semiconductor and semicondutor equipment positions here in the next few months.
My take, as a long term investor, is that I don't see a consensus that there is a major problem (and most other analysts apparently don't either), and the industry will continue to grow strongly with minor fluctuations. And of course, the industry has been cyclical and the 4th quarter is the best quarter for electronics sales. And besides, like I said before, after reading the WSJ article this guy tends to jerk you into and out of Intel and semiconductors in general so fast they can't keep track of how much commissions they make <g>. Maybe that is why Merrill promotes him as the "expert".
Just my two cents. I'm holding onto my FSII. I like the company and products, and long term we are on a growth track.
Best - Joe |
