Jeffrey,
I agree that brokerages make substantial profits from day trading (if they didn't what would be the point of making a market in a stock) and that some traders may make profits via inside information, trading ahead of 'buy' or 'sell' recommendations of their firm, however, I see such action as backround noise. The money it would take to manipulate a NASDAQ volume leader like ASND would strain the Treasury - not to mention the difficulty of getting so many MMs to collude...one MM would invariably stab another MM in the back if there looked like a good profit was to be had.
As for ASND having always made estimates in the past, this is true, however I might add that stocks are traded on the basis of expectations of future earnings and revenues...the past is a yardstick for the future but is after all it is well, history. I think fundamentally, ASND's situation is very much different than just a few months ago. ASND has very tough competetion in the RAS market from BAY, COMS, and CSCO. This will no doubt put a crimp in ASND's fat margins on the MAX-TNT... ASND's less than crisp execution of the transition to 56K may also cost customers, revenues and market share. I also don't see any evidence of ASND making inroads into CSCO's router monopoly, in spite of management's predections to the contrary. As for CSCC being accretive to earnings, I sure hope that is the case for the bulls, but face it, before the merger CSCC had missed earnings and was in a downward spiral.
As for ASND vs. APM, both stocks are in technology industries that are growing rapidly...networking on the crest of the demand for bandwidth and DDs on the trend toward the digitazation of more and more types of information. Currently, I see the DD sector a better bet than networking since DD stocks trade at lower PE/growth than the networkers. DDs trade at lower multiples due to the frequent price wars and cyclical nature of the business in the past - I think this paradigm no longer is valid for the DDs and in the future expect to see the PEs expand. Networking on the other hand has had fat margins in the past and there are new players (semiconductor manufacturers and box makers) wanting a piece of the action - this will hurt margins and revenues as well as the PE multiple paid for these stocks.
Christopher |
