Robert, maybe I'm reading things totally wrong, but IMHO it's more of a question of how good will their earnings be despite their DRAM business.
Need to check the SEC and look over their 10-Q's, but I think last Q, despite the recovery in DRAM prices from the preceding Q, their losses may have narrowed, but they were still losses. This Q, barring a dramatic recovery in the next two weeks, I'm assuming their DRAM ASP's are going to be lower. But then you get into the whole issue of well, how much on the cost side did the manage to squeeze out and how much did unit demand go up?
It's almost like TI is two separate companies - on one side you have this great diversified semicon products franchise, but then on the other you've got this memory chip business which despite what the individual companies themselves are doing, the industry just has too much production capacity.
I shorted because I'm operating under the assumption that it's run up on the heels of generally positive comments at the Salomon conf. last week, good piece on Dow Jones re: driving down costs on DLP's, the DSP venture fund, the fact that (I think) there was a DSP conference in San Diego this week, and then Dan Niles revises estimates. There was an analyst yesterday at Brown Brothers Harriman who said something to the effect of "this is the most absurdly valued stock I cover". Long-term, I like it a lot more than he does. Short-term, for my style, short-term 2-5 day swings - I'm sizing it up as sort of "alright, it made a nice run, not sure of the fundamental validity of the run, see something happening next week with MU that could be a problem, but then again the thing is just taking off..."
I took the risk. I deserve whatever happens - and since the futures look to be up I'm going to be in some pain on the open <g>
Don't know what do on the earnings play.
Good trading,
Tom |
