Vanni,
When negative estimate revisions come before a stock tanks, or before any "news" comes out that appears to justify it, then one must need take notice of it, and ask why.
But when they flow after a stock have already taken a massive hit, and it appears from "news" that it is fully justified, then it means a lot less. You still need to ask about it, but the question becomes a little different. You need to ask if it is already reflected in the stock, and when/if is likely to change again.
Seagate is probably dead money for the next 6 weeks. Maybe it will even go to the low 20s/high teens with a bad market, or more bad ASP news, and further tax selling. However, it is a strong buy now, IMO, and if it does go lower (and if I any cash left, which I may not, :( ), I will be in there buying. I may even buy some LEAPS if it gets to the 19-20 level, if the premiums aren't too steep. The company has too much potential to stay down there. Trading at a PSR of less than .7 now. They have realized their hit from the Baht, but the good part--the lower cost of doing business in SE Asia--will start coming in this quarter, and will increase with each quarter.
Of course, the wild card is the Korean/Japanese manufacturers--if they just want a piece of the pie and don't care about making any profit on their sales as they apparently are with DRAMs, then the industry is in trouble. |
