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Technology Stocks : Altera
ALTR 53.61+1.3%Jul 7 5:00 PM EST
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To: Tom Todd who wrote (382)8/8/1996 5:55:00 PM
From: Geof Hollingsworth   of 2389
 
Your points on inventories are well-taken, but I have a hard time believing that their inventory level is the one they planned. I went back an additional 3 quarters (to 9/94), and the inventory levels ranged from 112 to 148 days. I know that a lot of it is new vs old product, and that it is considered prudently reserved against, but still, 205 days is a lot of product, and gives the company less manuevering room in the event the current quarter is adrift from plan. I worry as well that Xilinx seems to have done a better job (or maybe was luckier) in keeping inventories in check, which could lead to a scenario where market forces would affect the two in vastly different ways. In sailing terms, Altera isn't covering Xilinx's tack, which leaves them exposed if there is a wind shift.

Anyway, I've gone ahead and written some covered calls into the recent strength.
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