Thank you Dave...I'm getting real close to pulling the trigger. Here's a brief of the sector rating that UTR is in from briefing.com :
<21) SEMICONDUCTOR.........2/3............2/4..........(+)
Comment: In November, we downgraded the sector to a slightly underperform rating to reflect the market's anxiety over
future earnings due to the unfolding crisis in Asia. The group performed horribly through year-end. But the story has changed
over the past several weeks and the chip group is now the best performing industry year-to-date (+21%). The explosive
recovery stems from the newfound belief that Asian concerns were overblown. Though the industry will get sideswiped by the
region's turmoil, chip companies will avoid a head-on-collision. In addition, renewed growth in Europe will help to offset some
of the weakness out of Asia. Strong demand for sub-$1000 PCs and the expected release of Windows 98 should bolster PC
sales in 1998 to northward of 15%. Another positive development is the modest recovery in DRAM prices, as some of the
Asian suppliers have experienced production difficulties due to financial problems. Though DRAM prices aren't likely to
sustain an upward push for long, the price change suggests that the worst is over. That sentiment sums up the improved tone in
the group. But before rushing back into the sector it is important to recognize that the shift has been psychological, not
fundamental. Despite the recent calm, Asia remains a region in turmoil. China and Hong Kong could be the next countries to
devalue their currencies, thereby reawakening earnings concerns. Against such an uncertain backdrop, stock selection is key.
One way to filter the potential winners from losers is to closely monitor the street's earnings revisions. Those companies that
have had earnings estimates materially downgraded will have trouble sustaining any upside momentum. A few such names are
Advanced Micro Devices, Cypress, Lattice and Motorola. Conversely, stocks with little to no change in estimates such as
Intel, Linear Tech and Analog Devices are well positioned to extend their recent gains. Overall, Briefing is raising its rating from
a 4 to short-term slightly outperform (2) and long-term neutral (3). Stocks: Advanced Micro Devices (AMD), Analog
Devices (ADI), Atmel (ATML), Avnet Inc. (AVT), C-Cube Microsystems (CUBE), Cirrus Logic (CRUS), Cypress
Semiconductor (CY), Intel Corp. (INTC), International Rectifier (IRF), LSI Logic (LSI), Lattice Semiconductor (LSCC),
Linear Technology (LLTC), Micron Technology (MU), Motorola (MOT), National Semiconductor (NSM), Texas
Instruments (TXN), Unitrode (UTR), VLSI Technology (VLSI), Xilinx (XLNX).>
I read an article today that January PC sales were only down 15% from December's volume, due largely in part to vendors slashing prices. This should help to move those disk drives. This whole drop is about disk drives??? That's all I can figure from what I've read. Do you know if this years earnings have already been revised to reflect the expected negative impact on earnings?
E.H.F. |
