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Technology Stocks : TECD - Tech Data
TECD 144.900.0%Jun 30 5:00 PM EST
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To: JOE who wrote (200)9/5/1997 10:15:00 AM
From: Rob S.   of 584
 
Any thoughts about a downside are misplaced. The chart has shown a nice basing period for the stock to take off. This morning (10:00) TECD opened up 2 1/2 and is now up over 3 on over 1.3 million shares traded. Institutional or big money ivestors are buying in. I think that it will move up 10%-20% over the next few days.

Tech Data and a few other well positioned distributors will benefit form the broadening out of the marketplace from being PC and network centered to being computer communications and highly customized. Large OEMs like Compaq, Dell and IBM have found it diffficult to deal directly at PC industry cost points with the diversity of users demands for network/internet ready systems, software and support. They also have a hard time with customized small orders. So they are all increasingly turning to the distributors for "channel assembly" operations.

Combined with very strong worldwide markets brought on by lower PC processor prices, the internet, and networking and by generally robust economies, the growth and profitability of TECD looks assured. Normally during price cutting periods disties felt the pince along with the OEMs. Since much of the cost cutting is coming out of the processors and because they are doing much more value added work that the computer manufacturer might otherwise profit from, the distributors margins remain healthy while selling increased volume.

This stock is going to move!
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