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Technology Stocks : Applied Magnetics Corp

APM 1.060

-1.9%

Jan 9 3:56 PM EST

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To: Jeff Mills who wrote (10206)	11/8/1997 11:46:00 AM
From: Mark Adams	Read Replies (1) of 12298

To expand on Jeffs statement, here is the relevant section of Barrons Q: How about some shorts? Force: I'd short Applied Magnetics, which makes disk-drive heads. They compete with Read-Rite. In fact, they tried to buy Read-Rite. The company has fallen behind in the state-of-the-art technology, called MR. The bid for Read-Rite was a defensive move, because of their weak position in MR. They missed their last quarter, earning 60 cents a share, versus estimates in the 70s. Read-Rite and the Japanese suppliers are ahead of them. I think the stock can go back to where it was before the most recent rally, and that's hat size. I believe their earnings next year could be zero. Morris: Where is the stock? Force: About 27. Everything is going to be MR by the second quarter of '98, and I just think they aren't going to be there. I'd also short Hutchinson Technologies, which also supplies parts to the disk-drive industry. There's some new technology that could displace what they do. My comments: (long on APM at a slight loss) The MR is an issue, as we know. But check out yahoo re RDRT. They released news that they will be taking a charge to write off TFI production (look for them to be taken to the woodshed Monday) HTCH is also 'slammed' without any real detail- but as most of us are aware HTCH and INVX are both rolling out suspension mechanisms with integrated leads. I don't think we can really say who will capture the market at this point.

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