In my case I am up for the year on earlier buys and sells and buying the stock and selling the call options agaqinst it. But over the past two weeks I am down. I expected IDTI to be a short term HOLD.
Putting things in retrospect, if that's posible in this frenetic atmosphere:
1] September-October are historically the worst months of the year for investors.
2] Semi stocks often sell off during this period as a knee-jerk reaction to results of the slow summer quarter.
3] IDTI is being hit in sypathy by bad news of: a) earnings dissapointments by Intel and a few others despite reporting earnings that were marginally 50% better than forecast. b) Intel's price reductions are in-line with expectations and do not alter IDT's prospects for the C6. c) Rummored impacts from the Hong-Kong and Asia crash. This effects IDTI little, as they manufacture most of the stuff here in the US and the primary markets for end products are here or in Europe. The lowering of costs for packaging may effect some IC mfgs' positively.
4] The market is, as I write this, pulling back up a bit. The US has served as a "bastion" against the storm of rocky markets overseas. It is more likely that money will flow into the US from overseas rather than out of it as overseas investors look for greater stability and relatively cheaper stocks compared to their comedstic markets.
5] IDTI is on the "cusp" of a major new pahse of growth with many new products that have recently been introduced and being designed into new products that are now or will soon roll-out of OEMs. This is a major bullish shift in IDT's fortunes.
6] While the success of sub $1,000 and sub $500 PC, WebTV, NCs and other internet and electronics devices has worked to lessen growth in >$1,500 PCs (Intel) it has created the opening of huge new markets that IDTI is very well positioned to move into. In fact, IDTI is now the LEADER in the WebTV marketplace and has entered the market with a low cost, low power Pentium MPU that, if only modestly successful, can double IDT's overal business.
In summary: The scenario is now in place for "smart" money to find glee in every twist and turn downward caused by panic selling. This is like money just pouring into to the pockets of those investors with the judgement to buy. Buy low, sell high. Buy when despair is at it's highest and sell when everyone is euphoric and confident that things can only get better. Blood is in the streets and American companies in general, and IDTI in particular, are in the best position in the worldwide economy that we have been in for decades. |
